Systems Limited has announced its financial results for the first nine months of 2019. Pakistan’s oldest software house is continuing its growth run as it reported a huge increase of 81.01% in consolidated profits for the period.
The company reported a profit of Rs. 1.22 billion, up by 81% as compared to Rs. 674 million reported last year.
Systems Limited’s financial health is improving as rupee devaluation and export rebate positively impacted its revenue growth. Most of the company’s revenue comes from exports.
The growth in profits can be attributed to an improvement in net sales, which were reported at Rs. 5.47 billion, up by 47.85% compared to Rs. 3.70 billion in the same period of last year.
The company’s profitability has increased due to the rupee’s depreciation with higher domestic sales due to automation driven by public/private sectors. Overall, there was an increase in business (exports) with better margins in the North American region. The software house also got an encouraging response from the European markets.
Cost of sales was up by 40%, reaching Rs. 3.75 billion, but the overall sales covered for the negative impact.
The exchange gain is reflected in ‘other income’ that jumped by 38.90% to Rs. 293 million for the holding company during the nine months. Whereas in Q3 2019, it had reported Rs. 197 million loss in other income which was likely due to exchange loss due to the devaluation of the rupee.
Systems Limited believes that the company’s business model is just not built around exchange gains.
The finance cost saw an increase of 88.75% to Rs. 30 million, owing to an increase in interest rates in the country. Earnings per share of the company increased to Rs. 10.10 from Rs. 6.10.
At the time of filing this report, SYS shares at the stock exchange were trading at Rs. 88, up by Rs. 0.88 with a turnover of 140,000 shares on Tuesday.