SINGAPORE (Feb 14): Silverlake Axis, a provider of digital economy solutions and services, saw its earning double to 67.5 million ringgit ($22.5 million) in the 2Q19 ended December, from 34.0 million ringgit a year ago.
2Q19 revenue grew 20% to 169.0 million ringgit, from 141.4 million ringgit a year ago.
This was led by an increase in revenue from maintenance and enhancement services, which rose 16% to 118.9 million ringgit due to new enhancement contracts secured during the quarter to support the digital banking and payments transformation initiatives of two established financial institutions in Singapore.
Software licensing revenue doubled to 19.7 million ringgit, from 10.0 million ringgit a year ago, mainly due to the delivery of new larger core banking contracts in Malaysia and new retail automation contracts in Vietnam and Hong Kong in 2Q19.
Software project services revenue rose 26% to 19.0 million ringgit in 2Q19, from 15.0 million ringgit a year ago. The increase was mainly due to higher revenue achieved from the progressive delivery of two new higher value Malaysian projects secured in late FY18 and new implementation projects secured from the retail industry in Hong Kong.
Gross profit jumped 32% to 108.1 million ringgit during the quarter, as gross profit margin rose 6 percentage points to 64% in 2Q19. This was mainly due to a change in revenue mix with a higher proportion of revenue recorded from higher margin software licensing segment and software project services during the quarter.
The group recorded other income of 12.7 million ringgit in 2Q19, compared to 1.3 million ringgit a year ago, mainly due to the recognition of a pre-tax gain of 8.8 million ringgit from the disposal of freehold land and higher realised foreign currency exchange gain from translation of bank balances denominated in foreign currencies during the quarter.
Finance costs surged to 6.5 million ringgit in 2Q19, from 0.4 million ringgit a year ago, mainly due to the quarterly fair value adjustment on the contingent consideration payable for the acquisition of SIL Group.
As at end December, cash and cash equivalents stood at 360.3 million ringgit.
Earnings per share jumped to 2.55 sen for 2Q19, from 1.29 sen a year ago. However, net asset value per share fell to 19.24 sen as at end December, from 19.20 sen as at end June.
Silverlake Axis has proposed a second interim dividend of 0.4 cent per share for the period. Together with a first interim dividend of 0.3 cent per share declared last quarter, this bring the interim dividends in 1H19 to a total of 0.7 cent per share.
“Following the recent expansion of the group's suite of digital banking solutions, our marketing team has been actively cross selling these capabilities to existing customers. Such marketing efforts are expected to strengthen relationships with customers and broaden our revenue base,” says Raymond Kwong, managing director of Silverlake Axis.
Moving ahead, the group says it will continue to implement ongoing as well as new software licensing and implementation contracts secured in late FY18 and 1H19, which will progressively add to group revenues.
Shares in Silverlake Axis closed half a cent higher at 51.5 cents on Thursday.
