Systems Limited 4QCY23 earnings arrive at PKR 5.3/share.

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Systems Limited (SYS) announced the financial result for CY23 whereby the company posted a PAT of PKR 8,689mn (EPS: PKR 29.8) against a PAT of PKR 6,629mn (EPS: 22.8) during CY22, up by 31% YoY. Meanwhile, earnings in 4QCY23 clocked in at PKR 1,542mn (EPS: PKR 5.3), which was up by 2% YoY. In addition to the result, the company announced a final cash dividend of PKR 6.00/share (PKR 5.00/share in CY22).

Result Highlights       

Net sales in CY23 clocked in at PKR 53,435mn, up by 68% YoY, which accounts for 187% and 71% YoY growth in telecommunications services and technology-related solutions, respectively. Every quarter, the topline during 4QCY23 surged by 39% YoY, settling at PKR 16,102mn.

Gross margins in CY23 were 25.56% vis-à-vis 27.19% in CY22. This reduction was predominantly driven by inflationary adjustments in compensation, rising energy costs, and the substantial amortization expenses associated with CLOS. The gross margins in 4QCY23 were 22.00% (up by 240bps YoY).

Other income increased 43% YoY, settling at PKR 3,194mn in CY23 due to significant exchange gains amid PKR depreciation. However, in 4QCY23, the other income was PKR 177mn, down 64% YoY, mainly due to the dividend income received in SPLY.

Finance cost elevated by 202% YoY, clocking in at PKR 869mn during CY23. In addition, the finance cost in 4QCY23 increased by 60% YoY, reaching PKR 215mn owed to jump in the short-term borrowings and higher interest rate environment.

Administrative and Distribution expenses grew by 72%YoY, possibly due to inflationary pressure and an increase in the resource pool.

The company booked effective taxation at 11.0% in 4QCY23 vs 4.5% in SPLY.

Courtesy – AHL Research



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