Silverlake Axis posts 7% increase in Q1 profit after tax

MAINBOARD-LISTED Silverlake Axis 5CP posted a 7 per cent increase in profit after tax for its first quarter ended Sep 30, 2021 to RM35.2 million (S$11.4 million), up from RM32.9 million a year ago.

Earnings per share stood at RM0.0132 for the period, up from RM0.0127 a year earlier.

Revenue for the quarter rose by 3 per cent year-on-year to RM152.5 million, from RM148.2 million.

In its voluntary business update, the enterprise technology, software and services company said that revenue growth was driven largely by project services as well as maintenance and enhancement works for clients in the banking segment. The company serves two-fifths of the top 20 largest banks in South-east Asia.

In particular, revenue from its software project services segment grew by 18 per cent to RM20.3 million as 2 new Mobius contracts are being implemented. Mobius is the company's cloud-based core banking system.

Maintenance revenue recorded growth of 7 per cent to RM60.2 million in Q1 FY2022 as new maintenance contracts came into operation after several key projects were implemented.

However, this was offset by a 33 per cent decline in software licensing revenue to RM5.4 million due to administrative delays in contract signing of a major licence deal with a bank. The 13 per cent decline in insurance ecosystem transactions and services revenue to RM7.7 million resulted from varying degrees of lockdowns in the countries where the company operates.

The company said that it remains cautiously optimistic as countries enter the endemic phase of the pandemic, and noted that since Q4 FY2021, there has been increased deal closure activities and momentum carried through to the first quarter ended Sep 30, 2021.

To keep the pace up in deal signings, it hopes to continue reaching out to new and existing bank clients with its modernised Silverlake Axis Integrated Banking Solution and newly launched 5th generation Mobius.

While its insurance and retail solutions have been impacted by the pandemic over the last 18 months, the company remains optimistic too, noting that in the retail industry segment, it has pivoted to a cloud and software-as-a-serivce model that has been well-received by customers.

Shares of Silverlake Axis closed at S$0.315, up S$0.005 or 1.6 per cent on Friday (Nov 12) before the business update was released.