Systems Limited (PSX SYS) Posts 31% YoY Profit Growth in 2023 Financial Highlights
Systems Limited (PSX: SYS) has released its financial results for the calendar year 2023, showcasing a significant increase in profit after tax (PAT). The company reported a PAT of Rs. 8.68 billion, marking a notable growth of 31 percent Year-over-Year (YoY) compared to Rs. 6.6 billion in the same period last year.
In the fourth quarter of CY23, the company’s earnings reached Rs. 1.54 billion, indicating a modest rise of 2 percent YoY. Alongside these results, Systems Limited announced a final cash dividend of Rs. 6.00 per share.
The increase in net sales for CY23 amounted to Rs. 53.4 billion, reflecting a substantial growth of 68 percent YoY. This growth was primarily driven by a remarkable surge of 187 percent in telecommunications services and a significant 71 percent increase in technology-related solutions.
Despite the impressive sales figures, gross margins for CY23 decreased to 25.56 percent from 27.19 percent in CY22. This decline was attributed to inflationary adjustments in compensation, escalating energy costs, and significant amortization expenses linked with CLOS. However, in the fourth quarter of CY23, gross margins improved to 22.00 percent, up by 240 basis points YoY.
Other income experienced a YoY increase of 43 percent, amounting to Rs. 3.194 billion in CY23, primarily due to significant exchange gains amid PKR depreciation. However, in 4QCY23, other income declined to Rs. 177 million, down by 64 percent YoY, mainly due to reduced dividend income received compared to the same period last year.
Finance costs surged by 202 percent YoY to Rs. 869 million during CY23, attributed to the increase in short-term borrowings and a higher interest rate environment. Similarly, finance costs in 4QCY23 rose by 60 percent YoY to Rs. 215 million.
The company reported an effective taxation rate of 11.0 percent in 4QCY23 compared to 4.5 percent in the same period last year.
Systems Limited’s earnings per share (EPS) for CY23 stood at Rs. 29.8, showcasing a significant increase compared to an EPS of Rs. 22.8 in the previous year.
