The Hindu Business Line : Firstsource net dips 40%

Mumbai, April 29 City-based BPO firm Firstsource Solutions has recorded a 40 per cent dip in net profit for the fourth quarter ended March 2008 to Rs 21 crore against Rs 34.9 crore recorded in the quarter a year ago.

Due to a loss on foreign currency loan and an exchange rate related ‘mark-to-market’ loss on the foreign currency convertible bonds (FCCB) that Firstsource had raised in November last year, the company took a hit of about Rs 19.5 crore, Mr Ananda Mukerji, Managing Director and Chief Executive Officer of Firstsource Solutions, told Business Line. Net revenues were up by 35.4 per cent to Rs 375.6 crore (Rs 277.3 crore)

In November last year, the company had raised $275 million in convertible bonds; primarily to fund its $330-million acquisition of US-based MedAssist Holdings. “We had raised the FCCB issue at a time when the rupee was at 39.5 to the dollar. At the end of every quarter we have to ‘mark-to-market’ it, based on the exchange rate prevalent at the end of that quarter,” said Mr Mukerji.

As the rupee weakened to 40.1 in the March quarter, the convertible bonds had to be restated at 40.1 and the difference was taken as the mark-to-market loss in the profit and loss account, he added.

For the year ended March 2008, it reported a 35.3-per cent rise in net profit to Rs 131.5 crore from Rs 97.25 crore in the same period a year ago. Revenues rose by 56.3 per cent to Rs 1,298 crore (Rs 831 crore).

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