Systems Limited sees 14% dip in profitability

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.

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