Karachi, May 04, 2023 (PPI-OT): SYS: Corporate Briefing key takeaways
Systems Limited (SYS) recently announced CY22 and 1QCY23 financial results. The company posted consolidated profit of Rs6,629mn (EPS: Rs22.8), +43% YoY for CY22 whereas for 1QCY23 SYS posted consolidated profit of Rs3,879mn (EPS: Rs13.4), +223% compared to SPLY. The company held a corporate briefing yesterday to discuss financial results and outlook. We present key takeaways from the session:
SYS gross margins for CY22 dropped by 5.4ppts YoY clocking in at 27.2% due to the one-off regarding sale of NdcTech's CLOS license and amortization of cost for Temenos CMB deal (a recurring expense for 5 years). Increased cost owing to recruitment and training of human resources is another major reason for the dip in margins.
Management shared that 84% of the total headcount is from Pakistan while the company is also hiring from Egypt and Jordan for its Dubai office. Management expects this high HR cost to normalize going forward.
Middle East segment was the main contributor to the company's CY22 revenue having a share of 42% in topline, followed by North America with 33% share, while 20% share came from local business. During 1QCY23, Middle East's share in the topline increased to 47% whereas North America contributed 26% followed by Pakistan and others which contributed 22% to the quarter's revenue.
According to the management, around 80% revenue of the company is US$-based, 5% Euro-denominated while 15% is PKR-based. On the other hand, 70-75% of the cost is PKR-based.
Management shared that the total number of clients contributing in excess of US$100k expanded to 191 in CY22 compared to 129 in CY21. Top 20 clients contributed about 48% to the overall revenue as per CY22 numbers.
Management apprised that its portfolio of investments has promising results and its associates, Jomo and Jugnu which are involved in the e-commerce business are on track. SYS has also constituted a research team of highly skilled professionals to explore strategic partnership opportunities in the metaverse and web-3.0 space.