|WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018|
Our profit margin is largely a function of our asset utilization and the rates we are able to recover for our services. One of the most significant components of our asset utilization is our seat utilization rate which is the average number of work shifts per day, out of a maximum of three, for which we are able to utilize our seats. Generally, an improvement in seat utilization rate will improve our profitability unless there are other factors which increase our costs such as an increase in lease rentals, large ramp-ups to build new seats, and increases in costs related to repairs and renovations to our existing or used seats. In addition, an increase in seat utilization rate as a result of an increase in the volume of work will generally result in a lower cost per seat and a higher profit margin as the total fixed costs of our built up seats remain the same while each seat is generating more revenue.
The following table presents certain operating data as at the dates indicated:
We expect our total headcount in fiscal 2019 to increase as compared to fiscal 2018 as the impact of an increased flow of business from new and existing clients is expected to continue to increase our hiring requirements in fiscal 2019.
We report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling or, to a lesser extent, the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the South African rand or the Philippine peso appreciates against the US dollar. Although a substantial portion of our revenue and revenue less repair payments (non-GAAP) is denominated in US dollars (46.5% and 47.6%, respectively, in fiscal 2018, 38.7% and 40.3%, respectively, in fiscal 2017 and 34.8% and 36.9%, respectively, in fiscal 2016), pound sterling (31.8% and 30.2%, respectively, in fiscal 2018, 39.6% and 37.0%, respectively, in fiscal 2017 and 46.9% and 43.8%, respectively, in fiscal 2016), and, to a lesser extent, Australian dollars (8.0% and 8.1%, respectively, in fiscal 2018, 7.2% and 7.5%, respectively, in fiscal 2017 and 6.9% and 7.3%, respectively, in fiscal 2016), and South African rand (5.6% and 5.8%, respectively, in fiscal 2018, 6.8% and 7.0%, respectively, in fiscal 2017 and 5.2% and 5.6%, respectively, in fiscal 2016), most of our expenses (net of payments to repair centers) are incurred and paid in Indian rupees (43.6% in fiscal 2018, 51.1% in fiscal 2017 and 54.2% in fiscal 2016) and, to a lesser extent, in South African rand (10.2% in fiscal 2018, 11.1% in fiscal 2017 and 11.0% in fiscal 2016) and Philippine pesos (9.5% in fiscal 2018, 9.4% in fiscal 2017 and 8.0% in fiscal 2016). The exchange rates between these currencies and the US dollar have changed substantially in recent years and may fluctuate substantially in the future.