Business Recorder
KARACHI: Systems Limited (SYS), Pakistan’s largest technology exporter, on Friday announced 21 percent surge in consolidated year-on-year (YoY) profit after tax for the first quarter (January to March) of calendar year 2026. The significant profit is supported by strong topline growth across regional markets, particularly the Middle East and North America, though profitability remained below market expectations due to lower margins. According to an analysis by Topline Research released on Friday, Systems Limited posted a consolidated profit after tax of Rs3 billion during the January-March quarter of 2026, translating into earnings per share (EPS) of Rs2.05, compared with the corresponding period of last year. However, quarterly earnings slipped by 2 percent compared to the preceding quarter. Sania Irfan, Topline Research Analyst, noted that the result came in below expectations primarily because of lower-than-anticipated gross margins despite robust revenue growth across multiple geographies. The company’s net sales rose 33 percent year-on-year to Rs24 billion during the quarter, driven mainly by strong performance in the Middle East business, where revenues increased significantly to Rs14 billion from Rs10.2 billion in the same period last year. North America also emerged as a key growth contributor, posting revenue growth of 33 percent year-on-year and 39 percent quarter-on-quarter, which analysts attributed largely to the consolidation of Confiz accounts following Systems Limited’s acquisition. According to the research report, the company expects the full financial impact of the acquisition to materialise in the second half of calendar year 2026. Despite strong revenue expansion, gross profit margins declined to 25 percent during the quarter, compared with the recent quarterly trend of around 30 percent. Margin contraction was recorded across all major operating regions. According to the report, North America recorded gross margins of 28 percent, Europe 33 percent, the Middle East 24 percent, Asia Pacific 29 percent, and Pakistan 19 percent during the first quarter. Meanwhile, other income increased sharply by 130 percent quarter-on-quarter to Rs340 million despite the company incurring an exchange loss of Rs75 million following appreciation in the Pakistani rupee. Operating expenses also rose during the period as Systems Limited continued to pursue aggressive expansion across international markets. Selling and distribution expenses climbed 39 percent year-on-year to Rs867 million, reflecting the company’s growth strategy and market development efforts. Finance costs increased substantially, rising 44 percent year-on-year and 42 percent quarter-on-quarter to Rs129 million during the reporting period. The company’s effective tax rate stood at 9 percent during the first quarter of 2026, compared with 7 percent in the same period last year and 14 percent in the previous quarter. Copyright Business Recorder, 2026
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