System foresees Middle East, APAC as potential markets for expansion

April 04, 2022 (MLN): After entering into new geographical markets such as Saudi Arabia, Egypt, Africa and Singapore, Systems Limited believes that the Middle East and APAC region offer great potential for growth opportunities, the management disclosed during a corporate briefing on Friday.

The company has already established its credibility in the international market which will help to achieve desired contracts in the international market.

To recall, Systems Limited managed to close the year ended on December 31, 2021, on a positive note as its profitability increased by more than twofold to Rs4.38 billion (EPS: Rs32.41), compared to Rs2.16bn (EPS: Rs16.17) in 2021.

The boost in the company’s bottom line was primarily caused by a 55% YoY surge in revenue to Rs9.87bn where major growth came from the Middle East posting an increase of 85%YoY while revenue growth for Pakistan/Europe/North America stood at 43/27/47%YoY, respectively.

Currently, the management commented that every business is moving towards digitalization and automation. This creates an opportunity for businesses like SYS to augment in the IT space, as people are investing in the IT sector more and more to stay competitive in this fast-moving world, according to key takeaways covered by Insight Securities.

Highlighting the expansion plans, the company is eyeing opening more offices in other cities in Pakistan. This will help in attracting more talented human capital which is the biggest asset of the company. Furthermore, the company is setting up infrastructures to cater to more resources, it added.

During the year, SYS added 1800 new IT professionals and the total number of employees stands at 5,320 till Dec’21. The revenue per IT resource stands at $30K, while the industry average in our region hovers around $30,000-35,000. The management of the company opines that there is still a growth possibility in revenue per employee.

Speaking of Retailistan, the company has invested $3mn, taking a 20% stake in the start-up. Moreover, the wholly-owned subsidiary of Retailistan i.e., Jugnu raised $22.5mn in the recent funding round while the company is expecting it will grow more in upcoming years.

Regarding plans of entering into business related to MetaVerse and Blockchain, the management told that it is in consideration and will acquire capability for this first, Arif Habib Research noted.

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