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Matrix announces the results of the second quarter of 2016

30/06/2016

Matrix completes a successful quarter, showing growth in all indicators (revenue, gross profit, operating profit, and net profit), both quarterly and semi-annually

Matrix, which experiences a momentum of growth, entry into new sectors of activity, and winning new projects, announced that it will hire about 200 employees by the end of the year to fill positions in cutting-edge technology

Matrix announces today the results of the second quarter of 2016, showing continued growth of the company in all financial indicators: revenue, gross profit, operating profit, and net profit, both in the second quarter and in the first half of 2016.
Moti Gutman, Matrix CEO: "We concluded a successful quarter with continued growth in all indicators. Despite the challenging market in Israel, characterized by a high level of competition and limited growth, we continue to demonstrate growth and success in the software services sector, which constitutes the bulk of the company' activity, and see continuous improvements in the training and deployment sector, and in the integration and infrastructure sector as a result of good performance in the area of cloud solutions."
"Despite the economic situation, we are experiencing a period of growth, winning large projects, and entry into new areas of activity, and as a result, we are engaged today in a massive wave of recruitment. Before the end of the year, we expect to hire approximately 200 employees, mostly in the fields of cyber and information security, first and foremost in development in the areas of Java technology, full stack, and DevOps, as well as experts in cloud solutions, BI, big data, and analytics. We offer a dynamic work environment at the forefront of technology, and employment in a company that is a leader in all areas of its business activity and is financially stable.
Quarter results
Revenues grew by about 3.4% to approximately NIS 585.7M, compared with NIS 566.3M last year.
Gross profit grew by about 1.5% to approximately NIS 91.3M, compared with NIS 89.9M last year.
Operating profit grew by about 3.2% to approximately NIS 40.3M, compared with NIS 39.1M last year.
Net profit grew by about 6.6% to approximately NIS 24.2M, compared with NIS 22.7M last year.
 
Results in the first six months of 2016
Revenues grew by about 6.3% to approximately NIS 1.2B, compared with NIS 1.1B last year.
Gross profit grew by about 4.8% to approximately NIS 187M, compared with NIS 178.3M last year.
Operating profit grew by about 6.7% to approximately NIS 84.5M, compared with NIS 79.1M last year.
Net profit grew by about 7.3% to approximately NIS 51.4M, compared with NIS 47.9M last year.
As of June 30, 2016, cash and cash equivalents and financial assets stand at approximately NIS 229.1M, compared with approximately NIS 196.6M on June 30 2015, an increase of 16.5%. Cash flow from current activity for the period amounted to approximately NIS 71.2M, similarly to the same period last year.
 
Summary of consolidated profit statements for three months and six months ending on June 30 of 2016 and 2015 (in NIS millions)
  
 
For three months ending on
Change in %
For six months ending on
Change in %
 
30.06.16
30.06.15
 
30.06.16
30.06.15
 
Turnover
585,744
566,341
3.4%+
1,219,087
1,146,801
6.3%+
Cost of sales and services
494,420
476,371
 
1,032,084
968,416
 
Gross profit
91,324
89,970
1.5%+
187,003
178,385
4.8%+
%
15.6%
15.9%
 
15.3%
15.6%
 
 
 
 
 
 
 
 
Sales and marketing expenses
19,486
19,256
 
39,777
37,189
 
Management and general expenses
31,523
31,637
 
62,715
62,023
 
Operating profit
40,315
39,077
3.2%+
84,511
79,173
6.7%+
%
6.9%
6.9%
 
6.9%
6.9%
 
 
 
 
 
 
 
 
Financing costs
5,680
6,474
 
10,202
12,137
 
Financing gains
783
(1,173)
 
308
629
 
Profit before taxes
35,418
31,430
 
74,617
67,665
 
Taxes on income
11,222
8,742
 
23,174
19,710
 
Net profit
24,196
22,688
6.6%+
51,443
47,955
7.3%+
 
 
 
 
 
 
 
Net profit of:
 
 
 
 
 
 
Owners of capital rights in the company
23,480
22,401
 
50,075
47,138
 
Minority rights
716
287
 
1,368
817
 
Net profit
24,196
22,688
 
51,443
47,955
 
 
 
 
 
 
 
 
EBITDA
46,007
44,627
3.1%+
95,939
90,226
6.3%+
%
7.9%
7.9%
 
7.9%
7.9%
 
 


 
Matrix continues its policy of dividend distribution on a quarterly basis at a rate of up to 75% of annual net profit.
On March 15, 2016, the rating company, Midrug, confirmed Matrix’s Aa3 issuer rating, attesting to the stability of the company. This rating has been maintained for the past nine years.
 Matrix achieved impressive wins this quarter: in the area of cyber, Matrix won a cyber defense project in the scope of about NIS 5M; consulting and integration projects for several banks, for a leading pharmaceutical company, for two insurance companies, and for a large public organization; in the area of ​​cloud computing, CloudZone, the cloud unit of Matrix, concluded several deals with high-tech and communications companies. Matrix BI won a strategic BI project in the scope of over NIS 1M for one of the largest Israeli banks. Matrix Digital won the project for developing the websites for a large financial entity in Israel, in the scope of over NIS 1M. In the area of offshore and NearShore services, Matrix concluded several new deals in Israel and Eastern Europe, totaling over NIS 13M per year, which will involve employing dozens of new workers.
According to Gutman, "in recent years, the IT market has experienced frequent changes in perception and the entry of new technologies. In less than six years, the cloud has become the norm, mobile made rapid inroads, big data and analytical solutions have become more important than ever, and social networks have changed radically the concept of customer and employee management. In addition, the area of cyber is in great demand, as are solutions for survivability and business continuity, both for business and regulatory reasons. Even the IoT area, which until now was more of a buzzword, has become a reality, as organizations realize the great business potential in this field. Today organizations adopt digital solutions as a business necessity. We are proud that Matrix is ​​at the forefront of all these technologies and is always pioneering and entering the field at the right time. Matrix employees are working for an organization that is an early adopter, and therefore always enjoy new challenges.
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