Systems Limited sees 14% dip in profitability

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MG News | March 24, 2025 at 10:12 AM GMT+05:00

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March 24, 2025 (MLN): Systems Limited (PSX: SYS) reported a profit of Rs7.46 billion [EPS: Rs25.55], reflecting a 14.14% decline compared to Rs8.69bn [EPS: Rs29.86] in the previous year.

The company declared a final cash dividend of Rs6 per share (60%) for the year ended December 31, 2024.

The company's revenue surged by 26.27% to Rs67.47bn, driven by strong sales growth, while the cost of revenue increased by 29.05%, resulting in a gross profit of Rs16.04bn, up 19.26% YoY.

Selling and distribution expenses rose by 58.15% to Rs2.48bn, while administrative expenses grew by 21.03% to Rs4.82bn.

Research and development costs declined by 16.06% to Rs92.26 million.

Impairment losses on financial assets surged significantly by 362.13% to Rs485.87m, while other operating expenses dropped sharply by 96.95% to Rs5.08m.

As a result, total operating expenses increased by 30.69%, weighing on overall profitability.

Despite this, operating profit stood at Rs8.15bn, reflecting a modest 4.33% YoY growth.

Other income plunged by 77.28% to Rs725.58m, while the share of loss from associates increased by 147.40% to Rs118.97m.

Finance costs provided some relief, declining by 51.99% to Rs465.26m.

Consequently, profit before taxation and levy fell by 10.45% to Rs8.29bn.

The company recorded a levy of Rs474.93m, down 17.40%, and a taxation charge of Rs356.35m, which surged by 276.41% YoY.

Ultimately, profit for the year declined by 14.14% to Rs7.46bn, primarily attributable to a drop in total comprehensive income.

Earnings per share stood at Rs25.55, down from Rs29.86 in the prior year, reflecting a 14.43% decrease.

Financial Results for the Year Ended December 31, 2024
Description Dec-24 Dec-23 %Change
Revenue from contracts with customers - net 67,473,021,160 53,435,483,177 26.27%
Cost of revenue (51,437,339,563) (39,859,693,289) 29.05%
Gross profit 16,035,681,597 13,845,519,888 19.26%
Selling and distribution expenses (2,482,298,867) (1,569,563,845) 58.15%
Administrative expenses (4,820,394,649) (3,982,846,207) 21.03%
Research & development expenses (92,264,918) (109,917,778) -16.06%
Impairment losses on financial assets (485,686,404) (205,137,109) 362.13%
Other operating expenses (5,083,691) (166,791,530) -96.95%
Total Operating Expenses (7,885,728,526) (6,034,056,469) 30.69%
Operating profit 8,149,953,071 7,811,463,419 4.33%
Other income 725,575,753 3,193,598,145 -77.28%
Share of loss from associates (118,973,681) (48,089,294) 147.40%
Impairment loss on investment in associates - (729,463,249)  
Finance costs (465,258,660) (868,990,456) -51.99%
Profit before taxation and levy 8,291,296,483 9,258,538,565 -10.45%
Levy (474,934,819) (574,977,711) -17.40%
Profit before taxation 7,816,361,864 8,783,560,854 -11.01%
Taxation (356,349,091) (94,670,951) 276.41%
Profit for the year 7,460,012,773 8,688,889,853 -14.14%
Attributable to:      
Equity holders of the parent 7,460,267,547 8,688,546,281 -14.14%
Non-controlling interest (254,774) 343,612 -174.15%
Total Profit 7,460,012,773 8,688,889,853 -14.14%
Earnings per share      
Basic earnings per share 25.55 29.86 -14.43%
Diluted earnings per share 25.37 29.86 -15.04%

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