Systems Limited profit climbs 21% in strong Q1

May 29, 2026 (MLN): Systems Limited (PSX: SYS) delivered a solid financial performance for the first quarter ended March 31, 2026, posting a net profit of Rs3.03bn. This marks a healthy 21% growth from the Rs2.50bn net profit recorded in the corresponding period last year.

Showing this robust bottom-line growth, the company's basic earnings per share (EPS) rose to Rs2.05, up from Rs1.71 (restated) in Q1 2025, while diluted EPS improved to Rs1.96 compared to Rs1.69 in the prior year period.

The core driver behind this continued profitability was sustained top-line growth alongside stable gross margins.

Net revenue from contracts with customers surged by 32.62% year-on-year to Rs23.98bn from Rs18.08bn, while the cost of sales rose largely in line at 32.59% to Rs17.94bn, preserving gross margins at consistent levels.

As a result, gross profit expanded by 32.71% to Rs6.04bn compared to Rs4.55bn in Q1 2025.

On the operational front, however, expenses grew at a faster pace.

Selling and distribution expenses rose by 39% to Rs867.12m, administrative expenses climbed 39.31% to Rs1.96bn, and research and development expenses surged by a sharp 247.59% to Rs61.34m.

Other operating expenses, meanwhile, declined slightly by 4.38% to Rs29.50m. In total, operating expenses increased by 40.33% to Rs2.92bn, outpacing revenue growth.

Despite this, the company still managed to post a strong operating profit of Rs3.12bn, a 26.27% improvement over the Rs2.47bn recorded in the same period last year.

Below the operating line, other income remained broadly stable, edging up 1.75% to Rs340.24m.

The company recorded no share of loss from associates in the current period, compared to a Rs9.00m loss booked in Q1 2025. Finance costs, however, rose sharply by 44.26% to Rs129.31m.

Profit before taxation and levy came in at Rs3.33bn, up 23.06% year-on-year. After accounting for a levy of Rs169.36m up 54.89% and taxation of Rs132.10m, Systems Limited closed the three-month period with a total profit after taxation of Rs3.03bn.

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