SINGAPORE (Aug 23): Silverlake Axis reported 4Q19 earnings of RM67.5 million ($22.3 million), 86% higher versus RM36.2 million in 4Q18.
The quarterly bottomline also brings FY19 earnings to RM245.6 million, 83% higher than RM134.1 million in FY18.
In 4Q19, revenue came in 30% higher at RM189.3 million from RM145.5 million a year ago, with the group’s software project services seeing the higher revenue increase of 262% y-o-y to RM35.2 million.
The increase in revenue was also due to higher contribution from the group’s software licensing, sale of software and hardware products and software-as-a-service for insurance processing.
As cost of sales increased by 8% to RM67.8 million, gross profit for 4Q19 came in at RM121.5 million, an increase of 47% from RM82.6 million last year. This was partially offset by lower contribution from credit and cards processing, while maintenance and enhance services remained flat at RM105 million.
Finance income more than doubled to RM1.2 million from RM0.5 million in the previous year, due to larger amount of deposits placed with financial institutions during the period.
The group saw a significant increase in other income of RM24.7 million from RM0.3 million a year ago, due to the recognition of a gain of RM14.8 million from fair value adjustment on earn-out consideration for the acquisition of Silverlake Investment and a gain of RM9.4 million from the recognition of a derivative instrument for the call option on the remaining 20% equity interest in XIT Group.
Selling and distribution costs nearly trebled to RM10.5 million, while administrative expenses were 75% higher at RM53.7 million and finance costs saw a large jump to RM7.2 million from RM52,600.
Share of loss of the group’s joint venture narrowed by 97% to RM0.4 million from a loss of RM13.9 million in the previous year, mainly due to the recognition of impairment loss on goodwill acquired from business combination by Silverlake HGH.
Andrew Tan Teik Wei, group managing director of Silverlake Axis, says, “The ongoing trade dispute between the United States and China has resulted in slower economic growth in many countries in Asia. If this trade dispute is prolonged, the general uncertainties could deteriorate into a more cautious business environment.”
Shares in Silverlake Axis closed at 51 cents on Friday before the results were announced.