Driven by revenue growth, gross profit rose 27% to RM104.4 million. However, gross profit margin was lower at 58% compared with 66% in the previous corresponding period. The decline was mainly attributed to higher contribution from lower margin business activities, such as software project services and sale of hardware products, as well as the consolidation of the Symmetri Group.
The consolidation of Symmetri Group also resulted in additional group operating expenses in Q2 FY2016. During the current business transition, the Symmetri Group will incur a higher cost structure under a Transition Services Agreement which expires in Q4 FY2016. Together with unrealised foreign currency exchange loss, a charge on share award pursuant to the SAL Performance Share Plan and professional fees for a special independent review, the Group’s administrative expenses increased from RM10.2 million in Q2 FY2015 to RM26.0 million in Q2 FY2016. In addition, the Group recorded a decline in the share of profit of associates and a joint venture and an increase in income tax expense. In spite of the healthy revenue growth, the lower gross profit margin and higher total expenses led to a 7% decrease in net profit attributable to shareholders to RM66.6 million in Q2 FY2016.
For the six months ended 31 December 2015, group revenue and shareholders profit rose 30% and 3% to RM313.1 million and RM135.2 million respectively.
As an appreciation to shareholders for their continuing support, the Board has proposed a tax-exempt second interim dividend of Singapore cent 0.75 per ordinary share. Taking into account the 1-for-5 bonus share issued last year, the second interim dividend for Q2 FY2016 will be paid on a larger share base compared to Q2 FY2015.
“After the completion of SunGard Ambit acquisition, we rebranded the business as Symmetri Group and started work on business consolidation as well as cross-selling of products and services. Although the higher cost structure will continue until the Transition Services Agreement expires in Q4 FY2016, we are streamlining to improve efficiency and reduce costs. With these ongoing efforts, we expect the synergistic benefits from the acquisition to materialise from Q4 FY2016.” commented Dr. Raymond Kwong, Managing Director of the Group.
Backed by an expanding suite of mission critical enterprise software solutions and service offering, SAL is well-positioned to capitalise on business opportunities as the competitive business environment in Asia encourages financial institutions and corporations to invest in digital and mobile technologies in order to protect and grow their market share. “The Group is constantly looking to expand its suite of software products and services. We remain open to selective opportunities that will allow us to broaden our customer base and enhance our geographical presence,” added Dr. Kwong.
This press release should be read in conjunction with SAL’s Q2 FY2016 results announcement released on 11 February 2016 to the Singapore Exchange.
About Silverlake Axis
Silverlake Axis Ltd (SAL) is a leading provider of digital economy solutions and services for major organisations in Banking, Insurance, Payments, Retail and Logistics industry. The Group's Silverlake Axis Software and Services Solutions are delivering operational excellence and enabling business transformations at over 200 organisations across Asia, including 40% of the largest banks in South East Asia.
Under Axis Systems Holdings Limited, the Group was listed on the SGX-SESDAQ on 12 March 2003. It was renamed Silverlake Axis Ltd in 2006 following the acquisition of SAACIS, the company that owns the Silverlake Integrated Banking Solution (SIBS) and the listing was transferred to the Mainboard of the Singapore Exchange on 22 June 2011.
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