Systems Limited (PSX: SYS) has reported a robust 40% year-on-year (YoY) growth in profit for the 9-month period ending on 30 September 2023. The company’s consolidated financial results indicate a profit surge from Rs. 5.1 billion to Rs. 7.1 billion during this period, with no announcement of cash dividends. In the third quarter of CY23, SYS posted a consolidated Profit After Tax (PAT) of Rs. 1.85 billion, reflecting a 14% YoY decrease from Rs. 2.15 billion in the same period last year.

SYS attributes this profit growth to an 85% increase in consolidated revenue, soaring from Rs. 20.1 billion to Rs. 37.3 billion. Both gross profit and operating profit also witnessed substantial growth, with a 59% and 35% increase, respectively. The company achieved a QoQ/YoY topline of Rs. 14.2 billion in July-September CY23, marking a 13.3%/62.9% increase, fueled by sustained market penetration in the MEA and APAC regions.

Despite improved cost management in Q3, gross margins faced pressure, standing at 27.3% (3QCY23) compared to 27.8% (2QCY23) and 31.2% (3QCY22), due to ongoing global inflationary pressures. The net profit for the period, including a Rs. 2.6 billion exchange gain, reached Rs. 7.1 billion, indicating a significant 40% YoY growth. Basic and diluted earnings per share also rose by 33%, aligning with the profit surge.

SYS reported a 74% surge in other income, rising from Rs. 1.7 billion to Rs. 3 billion in 9MCY23. However, finance costs increased by 326%, reaching Rs. 653.8 million. In Q3, finance costs saw a slight 2% QoQ decline due to reduced short-term borrowings, while other income declined by 37.4% QoQ, attributed to the absence of exchange gain, despite a substantial increase in short-term investments.

Administrative expenses during 9MCY23 spiked by 68%, reaching Rs. 2.9 billion, and the company paid Rs. 399 million in taxes, compared to Rs. 279 million in 9MCY22. Basic and diluted earnings per share for 9MCY23 increased to Rs. 24.57 and Rs. 24.38, respectively, compared to Rs. 18.47 and Rs. 18.37 in SPLY.

As of the latest update, SYS’s scrip on the bourse was Rs. 424.02, reflecting a 1.86% decrease or Rs. 8.05, with a turnover of 382,929 shares on Friday.