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Silverlake Axis posts 23% drop in FY2021 earnings to RM143.1 mil

Samantha Chiew
Samantha Chiew8/26/2021 06:24 PM GMT+08  • 3 min read
Silverlake Axis posts 23% drop in FY2021 earnings to RM143.1 mil
Silverlake Axis posts 23% drop in FY2021 earnings to RM143 mil.
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Silverlake Axis recorded earnings of RM143.1 million ($46.2 million) for its FY2021 ended June period. This is some 23% lower compared to RM184.7 million recorded in FY2020.

Revenue for FY2021 came in at RM626.1 million, 6% lower than RM663.7 million last year. This was due to lower contributions from project related revenue.

Maintenance and enhancement services grew by 3% y-o-y. Softwareas-a-Service (SaaS) revenue for insurance processing was flat, while retail grew at a significant 47% yy-o-y. As planned, Silverlake Japan ceased its operations in 1QFY2021 following the termination of the last customer contract for credit and cards processing in late FY2020.

Recurring revenue segments comprising maintenance and enhancement services, and SaaS remain a key revenue driver for the group and contributed 81% of total group revenue in FY2021. Maintenance revenue grew by 2% y-o-y, as the group secured new contracts and revised maintenance fees for existing contracts. Enhancement services revenue continue to maintain momentum in FY2021 and increased by 4%, with customers relying on the group to modernise their core banking platforms for the digital age.

SaaS Insurance processing revenue decreased marginally by 1%, due to prolonged movement control restrictions as a results of the pandemic. This caused lower claims processing activities, which resulted in lower traffic volume and hence fewer motor accident claims.

Revenue from SaaS for retail has shown significant growth of 47% and the group expects this momentum to continue as it pivots to SaaS offerings to the larger SME market.

Project related revenue comprising software licensing and software project services declined by 19% y-o-y, due to lower contribution from the software licensing and software project services.

Sale of software and hardware products also saw lower revenue contribution as hardware sales are seasonal and dependent on the requirements and specification to support the implementation of new or enhancement of existing systems. The lower sales could also be attributed to the deferment of capital expenditure during the pandemic period as well as the consumer market awaiting for the launch of the latest IBM I series in September 2021.

As cost of sales dropped by 12% y-o-y to RM249.2 million, gross profit came in 1% lower at RM276.9 million.

Other income was 51% lower y-o-y at RM11.5 million, while finance income was 53% lower at RM1.9 million.

During the period, the group recorded a share of loss of a joint venture of RM565, compared to a profit of RM1.4 million a year ago.

As at end-June, cash and cash equivalents stood at RM407.3 million.

The board has declared a final dividend of 0.52 cent per share, higher than that of 0.33 cent per share declared in the preceding year.

Shares in Silverlake Axis closed at 26 cents on Aug 26.

Photo: Silverlake Axis

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