Systems Limited sees 14% dip in profitability

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

0:00

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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