Silverlake Axis full-year profit down 6.9% as H2 profit slumps 19.6%

ENTERPRISE technology, software and services company Silverlake Axis (SAL) posted a 19.6 per cent drop in net profit for the six months ended Jun 30, 2023, to RM70.3 million (S$20.5 million) from RM87.4 million the year before.

Earnings per share for the half year fell by 14.9 per cent to RM0.028 for the period, from RM0.0329 a year ago. Revenue dipped 1.2 per cent to RM373.6 million, compared to the RM378 million recorded in the previous year. 

For the full year, the group’s net profit came in at RM169.6 million, down 6.9 per cent from RM182.2 million a year ago.

The results translate to full-year earnings per share of RM0.0676, against earnings per share of RM0.0685 Singapore cents in the previous financial year.

Full-year revenue, meanwhile, grew a modest 4 per cent to RM765.9 million.

In a full-year review of its performance on Tuesday (Aug 25), the mainboard-listed group, which noted that it serves 40 per cent of the 20 largest banks in South-east Asia, said project-related revenue remains “robust”, contributing a quarter of total group revenue.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

The segment, which includes software licensing and software project services, contributed RM175.9 million in FY2023, comparable to the previous year.

However, it noted a 12 per cent reduction in software licence revenue booked. This totalled RM73.9 million, versus RM84.2 million in the previous year.

Notwithstanding that, revenue from the “software project services (professional services)” segment rose 12 per cent to RM102 million in the same period. This was on account of increased project delivery services being undertaken across its market territories, it said.

SEE ALSO

Silverlake Axis half-year profit up 5%

Meanwhile, Silverlake Axis said total recurring revenue from maintenance and enhancement services, insurance ecosystem transactions and services, and retail transactions processing rose 5 per cent to RM569.4 million in FY2023, from RM540.6 million in the year prior.

Such revenue contributed about 75 per cent of the group’s total revenue, and has consistently remained the key revenue driver for the group, it pointed out.

Its bottom line was affected by a 281 per cent hike in finance income, to RM11.7 million in FY2023. This came as a result of higher interest earned from deposits placed with financial institutions, its financials showed.

Over the next 12 months, the group said that judging from almost all analyst reports and predictions, IT spend in banking and other financial services institutions in the Asia-Pacific region will grow in the “high single” digits.

The board has proposed a final dividend of S$0.006 per ordinary share for the financial year. The final dividend in the previous year was S$0.007 per share.

If approved, the final dividend will be paid on Nov 16.

In a separate bourse filing, the group said it has secured contracts to deliver digital innovation enhancement solutions to 73 of its existing customers between April and June.

The contracts, which are expected to be completed within 12 to 18 months from their signing dates, have an aggregate value of some RM93 million, and are expected to contribute positively to the results of the company in the current and following financial years, it disclosed.

Shares of Silverlake Axis closed flat at S$0.26 on Friday, before the results were released.