Matrix announces the results of the third quarter of 2010
15/11/2010
Company revenues increased by about 6.6% and amounted to approximately NIS 373M
Operating profit increased by about 8.3% and amounted to approximately NIS 32.5M
Net profit grew by about 4.5%, amounted to approximately NIS 21M
Matrix concludes the third quarter of 2010 with growth in revenues and profits and retains its status as the leader of the IT market in Israel. Moti Gutman, Matrix CEO: "Despite the High Holidays and the summer, we are finishing an excellent quarter, with growth in revenues, as well as in operating and net profit. In our core business, the software solutions and services sector, revenues grew by approximately 6% and operating profit by approximately 8%. Our early entry and leadership in developing technological fields allows us to deliver solutions and new areas, such as cloud computing, the results of which are manifest in growth in revenues and profits from integration and infrastructure solutions. Alongside the development of new areas, we are proud that our customers choose to expand their business with us in their various projects, and of new significant projects and clients."
Summary of Profit and Loss for Q3 2010 (in thousands of NIS)
In the third quarter of 2010 Matrix formed new relationships in all the sectors and services. Mobile/cellular projects show growing momentum in the public sector and the insurance industry; new projects include interface and integration for a high-tech organization; a core financial system in the field of taxation for a leading bank; a multi-channel project for a pharmaceutical company; a vendors’ site for an insurance company as well as various Internet sites for the IDF; a telecom message distribution system; a large-scale project for a classified security organization; a computerization project for a garage network and services for a leading car importer; storage and virtualization projects in the finances and public sectors; infrastructure installation projects for several high-tech companies; a BSM project for a leading high-tech company; software for the central computer of a large financial institution; an OEM contract for combining Matrix’s products with those of a large hi-tech company. The Nearshore/Offshore field accomplished significant achievements: the establishment of an Offshore center for an international company; establishment of a center for a client in the field of SEO; establishment of a Nearshore center in Chatzer Rafael in the field of IT development and testing; and winning the tender for the maintenance of computer systems for the IDF.
As a result of our successful partnership with Fiserv, an international provider of solutions for online banking, which we implemented at a leading Israeli bank, we won projects for new clients in Europe and the US.
Analysis of the Results
Company Revenues
In the third quarter, company revenues grew by approximately 6.6% and reached approximately NIS 373.2M compared with approximately NIS 350.1M in the corresponding quarter of the previous year.
Operating Profit
Operating profit grew by approximately 8.3% and amounted to approximately NIS 32.5M, compared with approximately NIS 30M in the corresponding quarter of the previous year.
Sectors of Activity
Revenues from the software solutions and services sector, the company's core business, amounted to approximately NIS 253.7M representing approximately 66.3% of revenues, compared with approximately NIS 239.8M for the corresponding quarter of the previous year, a growth of about 6%.
Operating profits in the software services sector reached NIS 24.8M (about 10% of revenues), compared with approximately NIS 22.9M in the corresponding quarter, a growth of about 8.3%.
Revenues from the marketing of software amounted to NIS 38.4M for the quarter compared with NIS 42M in the corresponding quarter of the previous year. Operating profits for the sector reached approximately NIS 4.5M and remained stable compared with the corresponding quarter of the previous year.
Revenues in the infrastructure, integration, and communication sector amounted to approximately NIS 55.7M for the quarter compared with about NIS 42.2M in the corresponding quarter of the previous year, a growth of approximately 32%. Operating profits for the sector amounted to NIS 2M compared with about NIS 1.1M in the corresponding quarter of the previous year, a growth of about 82%. Sector growth is caused, among other things, by the increase in demand for solutions in the field of cloud computing.
Revenues in the Training and deployment sector amounted to approximately NIS 35M for the quarter compared with approximately NIS 35.9M in the corresponding quarter of the previous year, and the operating profit amounted to NIS 1.2M compared with NIS1.5M in the corresponding quarter of the previous year, a decline of about 22%. The decline in the profits of the training and deployment sector reflects a slower rate of its recovery from the slowdown in the economy.
Net Profit
Net profit in the second quarter amounted to approximately NIS 21M, compared with around NIS 20M in the corresponding quarter of the previous year.
Cash Flow and Financing Sources
Positive cash flow from current activity for the period amounted to approximately NIS 66,831M. The company has cash reserves and short-term investments of approximately NIS 304M.
Dividends. The total amount of dividends distributed from the beginning of the period amounted to approximately NIS 38.7M.
Shareholders’ equity capital as of the date of the report amounted to about NIS 546M compared with approximately NIS 502M on 30.09.09.
The current ratio of the company stands at 1.9.