Delayed ramp-ups and foreign exchange losses have impacted Nasdaq-listed business process outsourcing (BPO) firm EXLService Holdings’ net income for the second quarter results ended June 30, 2008. The company also lowered its revenue guidance for the year ended December 2008.

Net income at $5.3 million (around Rs 22 crore) dipped by 5.3 per cent from $5.6 million (around Rs 24 crore) in the corresponding quarter last financial year. The company reported a forex loss of $14.35 million (around Rs 60 crore) for the quarter as compared to a forex gain of $229.4 million (around Rs 963 crore) in the corresponding quarter last financial year. Sequential (as on trailing quarter) net income dipped by 22 per cent from $6.8 million (around Rs 28 crore)—but revenue due to transformational deals grew up by 5.6 per cent.

Due to lower volumes expected from select clients during the second half of 2008 the company reduced its revenue guidance to $200-205 million from the prior outlook of $205-210 million. “As a result of one time charges related to the transfer of the Aviva Pune BOT, the volatile foreign exchange environment and lower volumes expected at select clients in the second half of 2008 we are adjusting our guidance for 2008,” said Matt Appel, chief financial officer of EXL.

Operating margin for the quarter ended June 30, 2008 was 9.8 per cent, compared to 6.1 per cent for the quarter ended June 30, 2007 and 9.9 per cent on sequential basis.

Rohit Kapoor, President and CEO of EXL, said: “As the economic environment in the US, UK and Europe continues to become more challenging, our clients are actively seeking strategic cost management solutions. Our performance this quarter was led by rapid growth in our transformation business across a well diversified base of client relationships.”

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