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A leading software firm is off to a good start in 2021. For the three-month period ended March 31, 2021, Systems Limited (PSX: SYS) has posted double-digit expansion in both its topline and bottomline on a consolidated basis. This comes after SYS posted nearly Rs10 billion in net revenues and over Rs2 billion in net profits in the year 2020.

Breaking down the financials, the Systems Limited holding company, which engages in software development, software trading and BPO services for Western and Middle-Eastern markets, contributed 76 percent of the consolidated topline in the quarter under review. The firm scored a topline gain of 42 percent year-on-year to reach Rs2.3 billion in 1QCY21.

In doing so, the holding company accounted for more than four-fifth of the 37 percent increase in consolidated revenues in the quarter. Asif Peer, the CEO and MD at Systems Limited, told BR Research that there was revenue growth from all geographies, because demand has been increased post-Covid. Besides, the ratio of exports in the revenue mix has also increased.

During the quarter, the holding company increased its operating profits by 108 percent to Rs658 million. However, its net profits increased by just 3 percent to Rs525 million. The CEO & MD pointed out that the company took a one-time exchange loss of approximately Rs163 million on its USD-based receivables, as the dollar had appreciated in the first quarter.

The two subsidiaries – a) the Pakistan-based EP Systems that operates the flagship airtime recharge platform of OneLoad and b) the Dubai-based TechVista that serves software development solutions in the MENA region – collectively increased their topline by 23 percent year-on-year to Rs745 million in the quarter under review. The growth at OneLoad is presumably driving the subsidiaries better performance.

The two subsidiaries collectively increased their operating profits by 264 percent and net profits by 318 percent year-on-year. In effect, the subs accounted for over three-fourth of the gains in consolidated net profits. If the subsidiaries continued to lend a helping hand and build on the holding company’s strong financials, SYS looks poised to conclude CY21 on an even better note than 2020.

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