Mumbai: IT solutions player Mastek on Thursday reported an 88 per cent decline in consolidated net profit at Rs 0.85 crore for the first quarter that ended on June 30, 2014.
The company had posted a net profit of Rs 7.09 crore for the corresponding quarter a year ago.
Net sales for the quarter declined 0.62 per cent to Rs 220.9 crore from Rs 222.28 crore a year ago.
The drop in the operating revenue is directly related to the reassessment of project timelines of a North American client resulting in the restatement of revenues to the extent of Rs 10 crore, a company statement said.
"The June quarter has been quite challenging on the financial front. The right shifting of the project milestones on a project has led to an impact of Rs 10 crore on the revenue and profits for the quarter."
"However, once the project is executed successfully within the revised timelines, the company will be able to realise profits out of the contingency held back on the said project in subsequent period." Mastek Group CFO and finance director Farid Kazani said.
"Although there has been an exceptional impact to the financials in the quarter, the business momentum remains intact with eight new accounts added in the quarter," Mastek group CEO and managing director Sudhakar Ram said.
"The UK geography has shown good improvement and we expect to announce few more deals in the coming quarter. The continued investment in the North America insurance market is expected to see conversions in the second half of the fiscal year."
The company said it has added eight new clients during the first quarter of FY15. Total client count was 133 clients as of June 30. The 12-month order backlog was Rs 549.8 crore ($91.4 million) as on 30th June, 2014 and in constant currency stood at Rs 542.2 crore ($90.5 million) as compared to Rs 541.8 crore ($90.4 million) at the end of Q4 FY14, reflecting an increase of 1.5 per cent quarter-on-quarter in rupee terms.
As of June, 2014, the company had a total of 3,223 employees, of which 2,368 employees were based offshore in India while the rest were at various onsite locations outside India. Employee count at the end of March 31, 2014 was 3,123.
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