The management of Systems Limited (SYS) held a Corporate Briefing Session on 1st Apr’22 to discuss the financial results for CY21 and future outlook:

 Brief Takeaways

·        To recall the company posted a consolidated profit after tax of PKR 4,380mn (EPS: PKR 32.41) in CY21 compared to PKR 2,164mn (EPS: PKR 16.17) in CY20, up by 2x YoY.

·        Net sales in CY21 witnessed a jump of 55% YoY, settling at PKR 15,304mn. As per revenue break-up disclosed by the company, the Telco, Retail & CPG, Technology, BFS Services and BPO contributed 19%, 19%, 16%, 15% and 10% YoY, respectively. On region/country-wise basis, major revenue of 42% came from North America, followed by Middle East and Europe contributing 32% and 7%, respectively. Meanwhile, local business comprised 19% of the total revenue.

·        The management informed that the currency mix in revenue consists of USD, AED, PKR and EURO at 42%, 32%, 19% and 7%, respectively. Whereas, 80% of the cost is in Pak Rupee while 20% of the cost is in AED.

·        The company has a 5-Yr revenue CAGR of 41%. Furthermore, the company expects revenue from exports to grow by 30% – 40% towards the end of CY22.  In addition to this, the company forecasts margin to improve in CY22.

·        The management stated that the company is focusing more on digital business compared to BPO business.

·        The company’s subsidiary E-Processing Systems throughput during CY21 witnessed a jump of 57% YoY, amid massive growth in financial services (cash-in/cash-out for EasyPaisa).

·        In CY21, the active retailers count clocked-in at 48,542 compared to 38,077 in SPLY.

·        The management further highlighted that as of 2022, the company has a footprint in Saudi Arabia, Egypt, South Africa, Europe and Middle East. The company is now investing in Singapore as it foresees good margins. Moreover, the company further aims to add new markets and alliances.

·        During CY21, the company acquired 20% stake in Retailistan at a cost of USD 3mn. Retailistan manages core operations of Salesflo, which is a retail technology startup focusing on automation of processes related to consumer good companies and retail sales process. 

·        On a question regarding plans of entering into business related to MetaVerse and Blockchain, the management told it is in consideration and will acquire capability for this first.

 Courtesy – AHL Research