Due to lower proportion of revenue contribution from higher margin software licensing and consolidation of Symmetri Group’s business which has lower gross margin, the Group’s gross profit rose only 6% to RM274.6 million for 9M FY2016 with a gross profit margin of 58%. The consolidation of Symmetri Group also resulted in additional operating expenses incurred due to ongoing business transition at a higher cost structure under a Transition Services Agreement. Consequently, profit before tax slid 2% from RM222.9 million in 9M FY2015 to RM218.2 million in 9M FY2016. In addition, higher withholding tax on some overseas revenue and higher taxable income generated by subsidiaries contributed to higher income tax expense and increased the effective tax rate to 10%. As a result, the Group’s net profit declined 5% to RM196.7 million in 9M FY2016 as compared to 9M FY2015.
On a quarterly basis, Group revenue increased by 10% from RM143.3 million in Q3 FY2015 to RM157.0 million in Q3 FY2016. Net profit attributable to shareholders amounted to RM61.5 million, a 20% decline from the previous corresponding period.
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.
As an appreciation to shareholders for their support, the Board has proposed a tax-exempt third interim dividend of Singapore cents 0.65 per ordinary share. Due to the 1-for-5 bonus share issued in July 2015, the share base for Q3 FY2016’s interim dividend is 20% larger compared to Q3 FY2015.
Going forward, the Asian economic growth is expected to moderate in 2016. Financial institutions in Asia are likely to leverage on information technology as they continue to expand in a more cost effective manner. Backed by an extensive suite of innovative software solutions and service offerings, SAL is well-positioned to support customers’ growth through enhancement of existing software systems and implementation of relevant digital and mobile technologies to deliver quick but effective solutions to meet their needs.
In addition to working with potential and existing customers on new and ongoing projects, the Group is focused on realising the anticipated synergies from the recent acquisitions. “Due to efforts in prior years, SAL is benefitting from a growing recurrent revenue base as Merimen Group broadens its insurance processing services and expands into new growth markets in the region,” commented Dr. Raymond Kwong, Managing Director of the Group. “Following the initial business transition of the Symmetri Group, we are increasing efforts in cross-selling services and streamlining operating procedures to improve profit margin,” added Dr. Kwong.
This press release should be read in conjunction with SAL’s Q3 and 9M FY2016 results announcement released on 11 May 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, Payment, Retail and Logistics industries. 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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