SYS - 1QCY23 Result Review -Record earnings in line with expectations, (AKD Off the Analyst's Desk Apr 28, 2023)
Systems Limited (SYS) announced its 1QCY23 result today, where it posted record-breaking quarterly NPAT of PkR3.9bn (EPS: PkR13.4), in line with our expectations and growing by 1.5xQoQ compared to earnings of PkR1.5bn (EPS: PkR5.2) in 4QCY22. Tremendous growth is witnessed on YoY basis, where the earnings have more than tripled (223% growth) compared to 1QCY22.
- Revenue for the quarter has increased by 101%YoY to reach PkR10.7bn, as organic growth along with hefty PkR depreciation have led the company’s topline. On a quarterly basis, Revenue is down by 8%QoQ as the one-off transaction of NdcTech’s license boosted Revenue in the previous quarter.
- The company has experienced a recovery in gross margins, clocking in at 26.1% against 19.6% in 4QCY22, where the lower margins of last quarter were on the back of the one-off transaction aforementioned. On a yearly basis, margins have seen a decline compared to the 30.0% recorded in SPLY as expansions into new countries have slightly pressured the company’s profitability.
- Operating profit for the company has posted an increase of 30%QoQ and 71%YoY as the company has successfully been able to keep Operating Expenses controlled despite the burgeoning topline of the company.
- Owing to the severe PkR depreciation aforementioned (25.7% as of 31’Mar), the company has recorded substantial exchange gains, leading to Other Income clocking in at PkR2.6bn for the quarter (PkR8.8/sh) and in line with our expectations.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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