Systems Limited (SYS) reported a consolidated profit after tax (PAT) of PKR 5,432 million (Earnings Per Share: PKR 18.6) for the nine months ending September 30, 2024 (9MCY24). This represents a decrease of 24% year over year, compared to PKR 7,146 million (EPS: PKR 24.5) in the same period last year (9MCY23).
However, consolidated earnings for 3QCY24 were Rs. 2,188 million (EPS: PKR 7.5), an increase of 18% year over year.
Net sales for 9MCY24 were Rs. 48.3 billion, an increase of 29 percent year over year. Additionally, topline sales increased across all segments in dollar terms, driving a 22% year-over-year increase to Rs. 17.2 billion in 3QCY24.
9MCY24 financial performance
| Metric | 9MCY24 | Change |
| Gross Margins | 25% | Down 430 bps YoY (290 bps in Q3) |
| Reasons for Decline | Inflation in compensation, rising energy costs, lower average exchange rate | |
| Administrative Expenses | Increased | Up 15% YoY / 26% QoQ |
| Distribution Expenses | Increased | Up 15% YoY / 26% QoQ |
| Other Income | PKR 186 million | Up 4% YoY |
| Finance Costs | Declined | Down 60% YoY / 30% QoQ |
| Reason for Finance Cost Decline | Lower short-term borrowings |
Summary
- Gross Margins dropped to 25% due to inflation, rising energy costs, and currency issues.
- Administrative and Distribution Expenses rose due to inflation and increased resources.
- Other Income was PKR 186 million, thanks to interest from subsidiaries.
- Finance Costs decreased significantly because of lower borrowings.
In 3QCY24, the effective taxation for the corporation was 9.9 percent, whereas in SPLY, it was 6.4%. As of this year, higher tax rates are applied in the UAE region, which led to this increase in taxes.
