NetSol profits drop 27.5% to Rs196.8m

October 30, 2024 (MLN): NetSol Technologies Limited (PSX: NETSOL) recorded a decrease of 27.5% YoY in its profits, with the company's after-tax profits falling to Rs196.84 million [EPS: Rs2.24] in the quarter ended September 30, 2024.

According to the profit and loss account, the primary reason for falling profits was a 15.8% decline in revenue.

Although the cost of sales also fell, it did so by a smaller amount, resulting in a 28.9% decrease in the company's gross profit, which dropped to Rs640.69m in Q3 CY24.

Accordingly, the gross margins worsened to 33.7% as compared to 40.0% in SPLY.

NETSOL benefited from a significant increase in other income, which rose by 156.6% to reach Rs380.79m in Q3 CY24.

However, the increase in expenses along with the tax expenditure offset these gains, resulting in a decline in profits.

On the expense side, the company's administration expenses rose 7.1% YoY to Rs375.19m, and distribution and selling expenses increased 14.5% YoY to Rs183.98m.

In contrast, other operating expenses decreased by 12.4% YoY to Rs136.16m.

The company’s finance cost shrunk by 13.3% and stood at Rs68.77m as compared to Rs79.31m in SPLY.

On the tax front, the company paid a higher tax worth Rs60.54m against the Rs32.53m paid in the corresponding period of last year, depicting a rise of 86.1%.

Amount in thousand except for EPS

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