Systems Limited (PSX: SYS) has reported a significant surge in profits, marking a 40% year-on-year (YoY) growth during the 9-month period that concluded on September 30, 2023. According to the company’s consolidated financial results, the profit for the period escalated from Rs. 5.1 billion to an impressive Rs. 7.1 billion. Despite this substantial growth, SYS did not declare any cash dividend for the period under review.
During the third quarter of CY23, the company recorded a consolidated profit after tax (PAT) of Rs. 1.85 billion, reflecting a 14% decrease from the corresponding period. SYS attributed this to a brief commentary, indicating an 85% increase in consolidated revenue from Rs. 20.1 billion to Rs. 37.3 billion. Additionally, gross profit and operating profit demonstrated notable growth, ascending by 59% and 35%, respectively.
Throughout July to September CY23, the company’s revenue stood at an impressive Rs. 14.2 billion, marking a notable increase of 13.3% and 62.9% quarter-on-quarter (QoQ) and year-on-year (YoY), respectively. This growth was largely attributable to continued penetration within the MEA and APAC regions, as suggested by AKD Securities Limited.
Despite facing inflationary pressures globally, which resulted in higher costs, the company managed to improve gross and operating profitability by 11.2% and 42.5% QoQ/YoY, respectively, owing to better cost management during the quarter. However, gross margins remained slightly under pressure at 27.3% (3QCY23) compared to 27.8% (2QCY23) and 31.2% (3QCY23).
The company’s net profit for the period amounted to Rs. 7.1 billion, showcasing a remarkable 40% increase from the previous year. Notably, basic and diluted earnings per share increased by 33%, aligning with the profit for the period.
Eliminating the currency impact, revenue showed a 33% increase in US dollar terms, emphasizing the company’s strong financial performance. SYS witnessed a substantial jump of 74% in other income, reaching Rs. 3 billion in 9MCY23, while simultaneously experiencing a significant increase of 326% in finance costs, amounting to Rs. 653.8 million during the period under review.
Administrative expenses during 9MCY23 spiked by 68%, reaching Rs. 2.9 billion, while the company also disbursed Rs. 399 million in taxes, compared to Rs. 279 million in the previous year. Basic and diluted earnings per share soared to Rs. 24.57 and Rs. 24.38, respectively, in 9MCY23, a substantial increase compared to Rs. 18.47 and Rs. 18.37 in the previous year.
As of the latest update, the company’s scrip at the bourse was Rs. 424.02, recording a 1.86% decline, with a turnover of 382,929 shares on Friday. This notable performance is indicative of the company’s robust financial standing and growth trajectory.
