WNS Announces Third Quarter Fiscal 2014 Earnings

MUMBAI, India - Jan. 15, 2014 - PRLog -- Mumbai, Maharashtra, India and New York, United States

WNS (Holdings) Limited (WNS) , a leading provider of global Business Process Management (BPM)** services, today announced results for the 2014 fiscal third quarter ended December 31, 2013.

Revenue less repair payments* in the fiscal third quarter was $119.6 million, representing a 5.4% increase versus the third quarter of last year and a 3.7% increase from the previous quarter. Year-over-year, revenue improvement was broad-based with the growth rate paced by strength in the Banking & Financial Services, Utilities, Shipping & Logistics, and Insurance verticals. On a year-over-year basis, revenue was pressured by currency headwinds resulting from depreciation in the South African rand and Australian dollar against the US dollar. Sequentially, revenue was favorably impacted by appreciation in the British Pound against the US dollar.  Excluding exchange rate impacts, constant currency revenue less repair payments* in the third quarter grew 6.0% year-over-year and 1.1% sequentially.

Adjusted operating margin* for the quarter was 18.4%, as compared to 13.9% in Q3 of last year, and 16.2% reported in the second quarter. On a year-over-year basis, operating margin improved as a result of depreciation in the Indian rupee against the US dollar, improved productivity and operating leverage associated with higher revenue. Partially offsetting this favorability were investments in global infrastructure which reduced seat utilization and the impact of our annual wage increases. The sequential improvement in adjusted operating margin* from Q2 to Q3 was largely driven by favorable currency exchange rates.

Adjusted net income (ANI)* in the fiscal third quarter was $19.8 million, up $5.8 million as compared to Q3 of last year and up $2.6 million from the previous quarter. Third quarter ANI* margin was 16.6%, as compared to 12.3% in Q3 of last year, and 14.9% reported last quarter.

From a balance sheet perspective, WNS ended the fiscal third quarter with $122.5 million in cash and investments and $87.6 million of gross debt. In the third quarter, the company generated $22.6 million in cash from operations, and had $5.7 million in capital expenditures. Days sales outstanding were 31 days, as compared to 32 days in Q3 of last year and 30 days reported in the previous quarter.

“During the third quarter, the company was able to grow our top line, expand margins and profits, and generate healthy cash flow.  Our new business pipeline remains robust, and we continue to move deals along at a slow and steady pace.  WNS added 4 new logos this quarter, including our fourth large deal of fiscal 2014.  This new relationship with a major US Insurer will begin with Finance and Accounting and actuarial services, and has long-term growth potential,” said Keshav Murugesh, WNS’s Chief Executive Officer.

“We believe recognition of our competitive positioning is improving as the BPM industry shifts towards domain-led solutions and higher value service offerings.  WNS plans to continue investing in enhancing our capabilities to meet the evolving needs of our clients, with the objective of growing our organic revenues at or above industry levels.”

Fiscal 2014 Guidance

WNS has updated guidance for the fiscal year ending March 31, 2014 as follows:

-- Revenue less repair payments* is expected to be between $470 million and $472 million, up from $436.1 million in fiscal 2013. This assumes an average GBP to USD exchange rate of 1.63 for the remainder of fiscal 2014.

-- ANI* is expected to range between $70 million and $72 million, up from $53.1 million in fiscal 2013. This assumes an average USD to INR exchange rate of 62.0 for the remainder of fiscal 2014.

“The company has updated our forecast for fiscal 2014 based on current visibility levels and exchange rates. Our revised guidance for the year reflects top line growth of 8%, with over 99% visibility to the midpoint of the range. This guidance represents 8% to 9% revenue growth on a constant currency* basis. Profitability is expected to expand at a much greater pace than revenue this fiscal year, with our revised ANI* guidance now reflecting 32% to 36% year-over-year improvement,” said Sanjay Puria, WNS’s Chief Financial Officer.

Media Contact Details

David Mackey ,  Corporate SVP–Finance and Head of Investor Relations ,  WNS (Holdings) Limited ,  +1(201)942-6261 ,  david.mackey@wns.com

Archana Raghuram ,  Head – Corporate Communications ,  WNS (Holdings) Limited ,  +91(22)40952397 ,  archana.raghuram@wns.com, pr@wns.com