Mainboard-listed Silverlake Axis has reported earnings of RM34.6 million ($11.3 million) for the 2QFY2021 ended December, 34% lower than earnings of RM52.8 million.

For the 1HFY2021, earnings fell 32% y-o-y to RM67.5 million from RM100.0 million previously.

Earnings per share for the 2QFY2021 and 1HFY2021 stood at 1.29 sen and 2.51 sen per share respectively on a fully diluted basis, compared to 2 sen and 3.78 sen per share in the corresponding periods the year before.

Revenue for the 2QFY2021 stood 16% y-o-y lower at RM160.5 million, due to a slowdown in project-related revenue segments.

The quarter’s revenue was the highest compared to the three immediate quarters before, due to the impact of the Covid-19 pandemic.

Get the latest Singapore corporate news stories for FREE

For more stories about where the money flows, click here for our Capital section

Revenue for software project services fell 7% y-o-y to RM12.7 million. License revenue decreased 38% y-o-y to RM14.3 million.

Recurring revenue from maintenance and enhancement segments remained stable at RM123.0 million in 2QFY2021.

Software-as-a-Service (SaaS) for insurance processing decreased by 10% y-o-y to RM9.0 million in the quarter as its claims volume was affected by the pandemic.

Gross profit for 2QFY2021 fell 14% y-o-y to RM100.4 million.

Gross profit margin (GPM) improved to 63% from 61% in the quarter with cost management initiatives.

Profit before tax (PBT) for the 2QFY2021, fell by 26% y-o-y to RM56.1 million. Similarly, PBT for the quarter was the highest compared to the three quarters before.

2QFY2021 EBITDA fell 25% y-o-y to RM68.8 million.

1HFY2021 revenue fell 13% y-o-y to RM308.4 million due to the deferment of big-ticket projects due to the pandemic.

PBT for the 1HFY2021 fell 21% y-o-y to RM105.4 million.

1HFY2021 EBITDA fell 18% y-o-y to RM135.7 million.

SEE: The worst is over for Silverlake Axis, 'buy' despite 1Q21 dip: CGS-CIMB

Following the drop in banks’ interest rates during the pandemic, the group earned lower finance income from deposits placements with financial institutions in 2QFY2021, compared to the year before.

Other income for the 2QFY2021 was lower at RM3.2 million due to a RM5.1 million gain from fair value adjustment on the consideration for the acquisition of SIA X Infotech Group in 2QFY2020.

Of the RM3.2 million in other income, RM1.4 million were from government subsidies and office rental concession from Singapore, Malaysia and Hong Kong.

Cash and cash equivalents as at Dec 31, 2020, stood at RM457.9 million.

In its outlook statement, the group says it might take some time before their figures return to pre-Covid-19 levels due to the “challenging” market landscape and the new waves of Covid-19 infections in some countries.

“Our customers are still hesitant to take bold steps to invest in transformational big ticket IT projects. The prevailing approach remains to retain their existing technology investments and incrementally add on or upgrade to what they have,” it says in a Feb 10 statement.

“Spend in this area is showing momentum and strong growth for the Group, given our large footprint and coverage in Asia. Our focus in the near and medium term is to work closely with our customers to help them optimise on their existing Silverlake solution investments – to provide the enhancements and extended capabilities that they need as they ride through this period of uncertainty,” it adds.

Shares in Silverlake Axis closed flat at 26 cents on Feb 10.