Hexaware Tech suffers Rs 81-cr hit in Q4

Hexaware Technologies has reported its fourth quarter and the full year results. The company said all unauthorised foreign exchange option contracts had been cancelled.

Due to an exceptional forex loss and certain one-time payment, Hexaware Technologies reported a net loss of Rs 81 crore in the fourth quarter ended December 31, 2007.

It reported a net profit of Rs 33.75 crore in the same quarter last year. Hexaware's revenues for the fourth quarter was up 7.9 per cent at Rs 259.17 crore compared with Rs 240.21 crore in the quarter ended December 31, 2006.

On a sequential basis (quarter-on-quarter), the company's net profit for the trailing quarter was Rs 26.91 crore and revenue grew at 1.8 per cent from Rs 254.61 crore. 
 

IN THE RED 4th quarter ended December 31
Rs crore	2006	2007	% chg
Gross revenues	240.22	259.18	7.90
Gross profit	90.08	82.52	-8.40
EBITDA	35.72	18.09	-49.40
Operating profit	30.44	12.00	-60.60
PBT	38.37	19.15	-50.10
Net profit	33.75	-81.00	-

For the full year, the company's net profit was down 94 per cent to Rs 7.22 crore from Rs 124.23 crore in financial year 2006. For the first time, the company crossed the Rs 1,000-crore mark revenue. It reported Rs 1,039.8 crore, up 22.6 per cent, compared with Rs 848.2 crore for FY06.

In response to the potentially fraudulent foreign exchange transactions conducted by a Hexaware executive, the firm has unwound all foreign exchange option contracts in Q4 FY07. As a result of this, Hexaware has booked a net loss of Rs 102.9 crore.

"It has been decided that the company will henceforth do only plain-vanilla forex cover. For any forex hedging transactions, one of the executive management signatories will be made compulsory. We took advice from KPMG and are in the process to implement an automated forex dealing system," said Rusi Brij, vice-chairman and CEO, Hexaware Technologies.

The company will be taking up the buyback option again with the board of directors.

In terms of billing rates, the company has announced a hike of 3-10 per cent for new clients. "We are aiming at getting better rates from the clients. For instance, we are billing cases at 8.75 hours a day, rather than 8 hours as in the initial period clients prefer to have work onsite. But going ahead, the offshore component will also grow by 200-250 basis points," added Brij.

The company added 16 new clients for the year and their number went up to 66.