SINGAPORE (Aug 26): Software services & solutions provider Silverlake Axis reported 4Q18 earnings of RM36.2 million ($12.1 million), down 5% y-o-y from RM38.3 million a year ago due to lower other items of income.
The group’s latest 4Q results brings its full year earnings for FY18 to a total of RM134.1 million, representing a more-than sixfold decline from its FY17 earnings of RM863.7 million in the previous year.
Revenue for the quarter grew 6% to RM145.5 million on higher contributions from maintenance and enhancement services, due to more enhancement contracts secured in South Asia, Africa and Europe in addition to higher progressive revenue recognised from ongoing enhancement contracts in Singapore and Malaysia.
In all, the group’s project related revenue segments showed y-o-y improvement with the exception of software project services due to comparatively lower progressive revenue from implementation contracts, although Silverlake expects higher recognition in the subsequent quarters with the progressive delivery of existing new contracts.
Under other items of income, finance income fell 81% in 4Q18 to RM0.5 million from RM2.8 million a year ago, due to lower deposits placed with financial institutions in the current year under review.
Notably, other income fell 98% to RM0.3 million compared to RM17.5 million in 4Q17 in the absence of pre-tax and related gains from the group’s disposal of shares in Global InfoTech (GIT) during the previous financial year.
The group also recorded a share of foreign currency translation loss of RM0.2 million compared to a RM0.9 million gain in 4Q17.
Gross profit nonetheless rose 22% to RM82.6 million on significant improvements to gross profit margin to 57% compared to 49% in 4Q17, given a change in product mix with increased contributions from the higher-margin software licensing segment and improved margin from credit & cards processing.
Going forward, Silverlake says it will focus on implementing its core banking contracts and IT projects secured over the last 15 months, while continuing with its marketing efforts to secure additional software projects.
According to Silverlake, the deliveries of these contracts are expected to underpin revenue growth in their respective segments over FY19.
“The group has started to capitalise on the acquired financial technology platform and capabilities to offer digital technologies and services to existing and potential customers. The benefits of such synergistic acquisitions are evident in our newly-secured contracts, for which we are deploying digital solutions from multiple wholly-owned subsidiaries,” says Raymond Kwong, managing director of the group.
Shares in Silverlake closed 1 cent lower at 46 cents on Friday.
