Karachi April 30 2024: System Limited, the largest IT company of Pakistan, profit drop 66% for first quarter ended March 31, 2024 as rupee gain against the dollar, according to company filing to the exchange.
“It is important to note that a PKR 1 change in average USD/PKR rate results in a ~1% change in the gross margins” states company in its filing.
Share price of the company drops PKR 8.07 or 2.03% in today trading at Pakistan Stock Exchange. The stock prices drop 13.39% since the start of the year.
During period under review, standalone revenue grew by 33% over same period last year from PKR 6,872.86 million to PKR 9,158.51 million. Gross profit and operating profit increased by 14% and 9% respectively, delivering a leveraged operating performance for the company.
Moreover, as a consequence of rupee appreciation, net profit for the period has been impacted by an exchange loss of PKR 207.64 million compared to the PKR 2,241.08 million exchange gain in March 2023 decreasing net profit by 66%, from PKR 3,639.53 million to PKR 1,235.21 million. Normalizing the impact of currency fluctuation, the net profit showed increase of 3% from same period last year. It is important to note that a Re 1 change in average USD/PKR rate results in a ~1% change in the gross margins. Since the rupee has appreciated against the dollar in Q1, the Company did not get the leverage on the wage inflation which has impacted the bottom line. However, the business continues to grow, and revenue has increased by 24% in USD terms
