Systems Limited (PSX: SYS) has posted impressive financial results for the first quarter of 2025, recording a 59% increase in profit after tax (PAT). The company’s PAT for the quarter ended March 31, 2025, stood at Rs2.5 billion, a significant rise compared to Rs1.57 billion during the same period last year. This performance marks a strong start to the fiscal year, driven by a combination of improved operational efficiency, cost optimization, and a reduction in exchange-related losses compared to the previous year.
The notable growth in PAT is attributed to the impact of last year’s exchange loss. When adjusted for currency fluctuations, Systems Limited’s PAT saw a more modest increase of 32.5% year-on-year. The company achieved these results by focusing on boosting productivity, enhancing billing efficiency, and strategically managing costs. Despite absorbing wage inflation and facing higher operational costs, Systems Limited achieved its best-ever operating profit in absolute terms for the quarter.
One of the key highlights of the company’s performance is the growth in its services revenue. Although Q4 2024 saw an elevated revenue base due to nonrecurring transactional revenues, Systems Limited still achieved year-over-year and quarter-over-quarter growth in service revenue for Q1 2025. Revenue from contracts with customers (net) increased by 19% to Rs18.08 billion, up from Rs15.19 billion recorded in Q1 2024. On the other hand, the cost of sales rose by 16.73% to Rs13.53 billion, contributing to a gross profit of Rs4.55 billion, a 26% increase from Rs3.60 billion in the same quarter last year.
Although the company faced higher distribution expenses, which increased by 25% to Rs623.88 million, and administrative expenses, which rose by 27% to Rs1.41 billion, it still managed to improve its operating profit by 24%, reaching Rs2.47 billion. A notable increase in other income—up by 691.41%, from a loss of Rs56.55 million last year to Rs334.39 million—also contributed positively to the bottom line. Moreover, the company’s finance costs dropped by nearly 40%, falling to Rs89.64 million.
As a result, Systems Limited’s profit before taxation and levy surged by 54% to Rs2.70 billion, while profit before taxation grew by 57% to Rs2.59 billion. The company’s tax expense for the quarter amounted to Rs92.82 million, reflecting a 15% increase compared to the previous year. After accounting for taxation, the company reported a robust PAT of Rs2.5 billion, reflecting a 59.21% increase over Q1 2024.
In terms of earnings per share (EPS), Systems Limited saw a remarkable 58.44% growth, with the EPS rising to Rs8.54 compared to Rs5.39 in the same quarter last year.
Looking at the company’s key financial indicators for Q1 2025:
- Revenue from contracts with customers (net): Rs18.08 billion (up 19% from Q1 2024)
- Cost of sales: Rs13.53 billion (up 16.73% from Q1 2024)
- Gross profit: Rs4.55 billion (up 26% from Q1 2024)
- Operating profit: Rs2.47 billion (up 24% from Q1 2024)
- Profit before taxation: Rs2.59 billion (up 57% from Q1 2024)
- Profit after taxation: Rs2.5 billion (up 59.21% from Q1 2024)
- Earnings per share (EPS): Rs8.54 (up 58.44% from Q1 2024)
These results underscore Systems Limited’s resilience in the face of challenges and its ability to deliver strong financial performance through strategic cost management, operational optimization, and effective revenue growth. As the company moves forward into 2025, it is well-positioned to continue building on these positive financial trends.