Systems Limited (SYS) has announced its financial results for the first nine months of the calendar year 2024 (9MCY24), reporting a consolidated profit after tax (PAT) of Rs. 5,432 million, or earnings per share (EPS) of Rs. 18.6. This marks a 24% decrease from the Rs. 7,146 million (EPS: Rs. 24.5) recorded in the same period last year (9MCY23).

In contrast, the company’s consolidated earnings for the third quarter of 2024 (3QCY24) rose by 18% year-on-year, reaching Rs. 2,188 million (EPS: PKR 7.5).

Net sales for 9MCY24 increased by 29% year-on-year, totaling Rs. 48.3 billion. The topline for 3QCY24 grew by 22% year-on-year to Rs. 17.2 billion, driven primarily by dollarized revenue growth across all verticals.

However, gross margins for 9MCY24 declined by 430 basis points year-on-year, largely due to inflationary adjustments in compensation, rising energy costs, and a lower average exchange rate. During the third quarter, gross margins fell to 25%, down by 290 basis points year-on-year for similar reasons.

Administrative and distribution expenses increased by 15% year-on-year and 26% quarter-on-quarter during the third quarter, likely due to inflationary pressures and an expanded resource pool.

Other income for the quarter was Rs. 186 million, up 4% year-on-year, attributed to interest income from subsidiaries and an increase in cash and cash equivalents.

Finance costs in 3QCY24 decreased by 60% year-on-year and 30% quarter-on-quarter, owing to reduced short-term borrowings.

The company reported an effective tax rate of 9.9% for 3QCY24, compared to 6.4% in the same period last year. This increase in taxation is due to higher tax rates implemented in the UAE region this year.