Systems Limited has announced its financial results for the first half of 2019. Pakistan’s oldest software house is continuing its growth run as it reported a huge increase of 93% in its consolidated profits for the period under view.
The company reported a profit of Rs. 878.18 million as compared to Rs. 453.04 million in the same period last year.
Systems Limited’s financial health is improving as rupee devaluation and the export rebate positively impacted the revenue growth. Most of the company’s revenue comes from exports.
The growth in profits can be attributed to an improvement in net sales as it was reported at Rs. 3.5 billion, up by 53.61% compared Rs. 2.3 billion in the same period of last year.
Overall, the profits were up due to higher domestic sales, an increase in business (Exports) and better margins in the North American region. The software house also got an encouraging response from the European markets. The company, however, benefited the most from foreign exchange, as the rupee devalued against the US dollar.
The cost of sales was up by 47.58%, reaching Rs. 2.47 billion, but the overall sales covered for the negative impact.
The exchange gain is reflected in ‘other income’ that jumped by 81% to Rs. 294 million for the holding company. However, Systems Limited believes that the company’s business model is just not built around exchange gains only.
The finance cost saw an increase of 144.73% owing to an increase in interest rates in the country. Earnings per share of the company were increased to Rs. 7.61 from Rs. 4.11.
System’s script at the exchange was closed at Rs. 83.34, up by Rs. 1.89 or +2.32% with a turnover of 0.08 million shares on Tuesday.
| Consolidated Condensed Interim Profit and Loss account for Six months ended 30 June 2019 (Rupees) | |||
|---|---|---|---|
| Rs. Jun-19 | Rs Jun-18 | % Change | |
| Revenue – net | 3,580,778,430 | 2,331,108,188 | 53.61% |
| Cost of sales | (2,477,916,571) | (1,679,069,483) | 47.58% |
| Gross profit | 1,102,861,859 | 652,038,705 | 69.14% |
| Distribution cost | (95,484,319) | (65,146,617) | 46.57% |
| Administrative expenses | (321,590,760) | (232,527,168) | 38.30% |
| Other operating expenses | (67,008,726) | (46,162,700) | 45.16% |
| Other income | 294,009,653 | 162,471,614 | 80.96% |
| Operating profit | 912,787,707 | 470,673,834 | 93.93% |
| Finance cost | (19,791,671) | (8,087,125) | 144.73% |
| Profit before taxation | 892,996,036 | 462,586,709 | 93.04% |
| Taxation | (14,809,628) | (9,541,840) | 55.21% |
| Profit after taxation | 878,186,408 | 453,044,869 | 93.84% |
| Earnings per share – basic | 7.61 | 4.11 | 85.16 |
