Net profits grew by approximately 40%
Operating profit grew by approximately 4.5% and profits from core business by approximately 15%
Compared with the corresponding quarter of the previous year, the revenue levels remained the same despite the economic slowdown
Cash flow from regular activity is excellent and reached approximately NIS 63M year-to-date
Despite the economic crisis, Matrix has improved its results and retains its leading position in the Israeli IT market in the second quarter of 2009. Moti Gutman, Matrix CEO: “We had a good quarter, despite the slowdown in the economy. The diversified structure of the profits, services, and sectors is at the basis of Matrix's unique ability to cope with the challenges of the period. The experienced management team and risk management policy of the company enable us to navigate successfully even in times of economic crisis."
Similarly to previous years, the consulting company IDC again graded Matrix as a leader in the Israeli IT services market, as did several weeks ago the consulting firm STKI, which graded Matrix as a leader in the software services market and in most of the important categories such as software development, CRM systems, training and deployment, software testing, and more.
Gutman adds: "The second quarter is usually a weak period, and this in addition to the slowdown in the economy. Nevertheless, we succeeded in preserving the profit level compared with the same quarter last year, achieving approximately 12% growth in profits and 15% in operating profits from core businesses. The crisis has manifested itself in an erosion of our gross profit compared with the corresponding quarter of the previous year owing to the erosion in the prices of software development and in profits from new deals, but there is a slight improvement compared with the first quarter. The slowdown is reflected also in the results of training and hardware deals. Our early preparedness for the crisis is clearly reflected in the financial reports: reduction in operating expenses and in the salaries of senior employees, and focus on the added value we provide our customers and on growth areas. In the merger with TAKT created both synergy and increased efficiency. We were able to achieve our goals: significant improvement in net profits resulting from improved operating profit and financing, growth of operating profit, and excellent cash flow.
SUMMARY OF PROFIT AND LOSS FOR THE SECOND QUARTER OF 2009
|
|
|
|
|
|
31.06.08 |
|
Turnover |
355,665 |
353,956 |
|
Cost of sales and services |
287,541 |
282,063 |
|
Gross profit |
68,124 |
71,893 |
|
R&D expenses |
300 |
300 |
|
Sales and marketing expenses |
15,186 |
16,251 |
|
Management and general expenses |
25,009 |
28880 |
|
Loss (capital gain) from realization of permanent assets |
71 |
98 |
|
Profit from regular activities |
27,558 |
26,364 |
|
Net financing costs |
8,753 |
15,630 |
|
Net financing gains |
11,456 |
7,312 |
|
The company’s share in the losses (profits) of affiliated companies |
139 |
360 |
|
Profit before taxes |
30,122 |
17,686 |
|
Taxes on income |
7,700 |
1,680 |
|
Net profit |
22,422 |
16,006 |
In the second quarter of 2009 Matrix continued to consolidate its status as a leader in the Israeli IT market in a wide range of sectors and services: it won the contracts to develop a core system in three hospitals; an upgrade of the software and hardware systems at a leading credit card company; multi-million-dollar product development deals for financial and defense institutions; a large-scale testing project for a government organization; a system deployment project for insurance agents for a large insurance company; a virtualization project for an insurance company; a marketing site for a leading credit card company; a system for management of automated warehouses for a leading trading company and for a distribution company; targeted IPHONE development for clients in the financial sector; launching of several significant projects such as Leumi Digital, including the Mobile area, a system of branches at Mizrahi Bank (including some abroad), and more.
Over the period of the report, growth continued in the areas of software services, the company’s core business, and it reached approximately 68% of the company’s total revenues, indicating focus and growth in the areas of Matrix’s added value, which reached 12% of the company's revenues and 15% of its operating profit.
Company Revenues
Results of the second quarter of 2009 compared with previous years
Analysis of results
Company revenues amounted to approximately NIS 355.7M, compared with NIS 354M in the corresponding quarter of the previous year, which indicates maintained stability despite the economic slowdown. Revenues amounted to approximately NIS 730.7M and increased by about 7.5% compared with the corresponding quarter of the previous year.
Revenues from the software services sector, company’s core business, reached 68% of total revenues and amounted to approximately NIS 253M compared with NIS 225.6M in the corresponding quarter of the previous year, an increase of approximately 12%. Revenues from this sector in the second quarter reached approximately NIS 507.5M, an increase of approximately 20% compared with the corresponding quarter of the previous year. Operating profits from this sector reached approximately NIS 20M, an increase of approximately 15% compared with the corresponding quarter of the previous year.
Marketing of software products sector. Revenues amounted to NIS 40M, and the results indicate that stability has been maintained in this sector's revenues and profitability level.
Revenues in the Infrastructure integration and communication sector amounted to approximately NIS 43.5M; despite the decrease in revenues, a slight improvement in profitability rate was achieved.
Revenues in the Training and deployment sector amounted to approximately NIS 35M compared with NIS 42.6M in the corresponding quarter of the previous year. The decrease in revenues in this sector reflects the slowdown in the economy. Moreover, the Training and Deployment division initiated several investments such as the establishment of a scholarship fund for specialists laid off from hi-tech companies, the opening of a branch in Nazareth, and an accessibility services project based on employment of disabled workers.
Growth of Matrix revenues in Q2/2004-2009
(NIS millions)
Operating Profit
Operating profit grew by approximately 4.5% and amounted to approximately NIS 27.6M, compared with NIS 26.4M in the corresponding quarter of the previous year.
Growth of operating profit in Q2/2004-2009
(NIS millions)
Net Profit
Net profit in the quarter grew to approximately NIS 22.4M, compared with approximately NIS 16M in the corresponding quarter of the previous year, a growth of about 40%. The growth in net profits results from the increase in operating profit and improvements in financing.
Growth of net profit in Q2/2004-2009
(NIS millions)
Cash flow and Financing Sources. In the second quarter, cash flow from current activity amounted to over NIS 63M. Cash flow serves the company's investments and financing.
The company has cash reserves and short-term investments of NIS 306M.
Dividends. On 17.6.2009 the board of directors of the company decided to distribute dividends once per quarter. Accordingly, on 19.07.2009 a dividend of 20 agorot per share was distributed for a total of NIS 11.8M, and on 23.04.2009 a dividend of 57 agorot per share was distributed for a total of NIS 33.5M.
Shareholders’ equity capital as of the date of the report amounted to about NIS 493M, compared with approximately NIS 455.6M on 30.06.08.
The current ratio of the company stands at 2.11.
