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Matrix publishes the results for the first quarter of 2018 and shows continued growth on all indicators

16/05/2018

Net profit in the first quarter of 2018 surged by about 24.4%,

Matrix published the results for the first quarter of 2018. The company continues to show growth on all the key indicators: revenues, gross profit, operating profit, and net profit.
 
 
In the first quarter of 2018, the  revenues of Matrix grew to approximately NIS 777.6M, compared with approximately NIS 696.6M in the first quarter of 2017, an increase of about 11.6%. The increase in sales is due to the expansion of activity in all sectors, as well as to the initial consolidation of companies acquired in the US.
 
Operating profit increased by about 7.2%, to approximately NIS 52M, compared with approximately NIS 48.5M in the corresponding quarter of the previous year.
 
Net profit surged by about 24.4%, to approximately NIS 35.1M, compared with approximately NIS 28.2M in the first quarter of 2017. The increase in net profit is due mainly to an increase in operating profit and a decrease in financing expenses, offset by a slight increase in tax expenses.
 
Moti Gutman, CEO of Matrix: "Matrix continues to show growth on all the indicators and in all its activities at the beginning of 2018, and continuously throughout recent years. We are proud that despite the competition in the field in which we operate, the frequent changes, and the challenges in recruiting technology experts, we continue sustained growth. The year 2018 will be characterized by our focus on the US market, in which we have made several acquisitions in the past two years, and where we are currently in the process of merging the acquired companies, investing in employees and in increasing sales. We view the US market as a strategic market for the growth of Matrix in the coming years. At the same time, we continue to acquire companies and increase activities in Israel, to expand and enhance our value propositions to our customers. Additionally, because of the considerable shortage of high-tech specialists, this year we are intensifying our activities aimed at training more and more graduates who can rapidly fill positions in the industry. We do this through retraining programs and additional courses at John Bryce Training, the largest technology training organization in Israel, and through training based on the bootcamp model by Infinity Labs, a subsidiary of Matrix. We regard the training of high-quality workers who will join the industry as an important national mission."
 
Gutman adds: "We continue to grow in many areas in which we are accepted as market leaders: analytics and big data, cyber, cloud computing, digital and mobile, regulation and compliance, training and deployment, and more. Matrix is ​​currently in the process of implementing some of the major strategic projects it has won in the past year, inluding the project for the establishment of the credit database for the Bank of Israel, a project for setting up a cyber network for a foreign country, and many more. The research company STKI has recently published the rankings in the information technology market for 2017. For the 13th year in a row, Matrix was ranked as the leader in the software services market in Israel. In 27 categories, Matrix was ranked as a tier one company, and in 18 areas Matrix was named as the leading company in Israel. Our stability and robustness continue to be recognized: for the 11th consecutive year, in February 2018, the rating company Midroog confirmed the Aa3.il issuer rating of Matrix, with a stable outlook, the highest ranking of companies in the industry. Furthermore, according to the BDI Coface ranking of the most rewardingh places of employment, which was published last week, Matrix is ranked among the top 50 companies, and first among all the software service companies in Israel."
 
Dividends
Matrix continues its dividend distribution policy at a quarterly rate of up to 75% of net profit. On March 27, 2018, a dividend in the amount of approximately NIS 29.6M was distributed, and today we announced an additional dividend distribution in the amount of approximately NIS 26M (42 agorot per share).
 
Summary of reports for the three months ending on March 31, 2018 and 2017 (in NIS thousands)
 
For three months ending on
 
 
31.03.18
31.03.17
Difference in %
Turnover
777,656
696,667
11.6%+
Cost of sales and services
668,121
594,623
 
Gross profit
109,535
102,044
7.3%+
% from sales
14.1%
14.6%
 
 
 
 
 
Sales and marketing expenses
25,391
22,066
 
Management and general expenses
32,056
31,394
 
Operating profit
52,088
48,584
7.2%+
% from sales
6.7%
7%
 
 
 
 
 
Net financing costs
5,239
8,732
 
Net financing gains
--
(355)
 
The company’s share in the gains (losses) of affiliated companies
24
(31)
 
Profit before taxes
46,873
39,466
 
Taxes on income
11,731
11,214
 
Net profit
35,142
28,252
+24.4%
% of sales
4.5%
4.1%
 
 
 
 
 
Net profit of:
 
 
 
Owners of capital rights in the company
34,202
28,064
21.9%+
Minority rights
940
188
 
Net profit
35,142
28,252
24.4%+
 
 
 
 
EBITDA
58,997
55,438
6.4%+
%
7.6%
8%
 
 
Analysis of income by sector
Matrix operates in five activity sectors: software solutions and services and added value in Israel; software solutions and services in the US; marketing and support of software products; integration and IT infrastructure solutions; and training and deployment. In the course of the first quarter, revenue growth in all five operating segments continued, with revenues increasing in all the regions in which it operates: Israel, the US, and Europe.
Revenues from the software solutions and services sector in Israel in the first quarter of 2018 amounted to approximately NIS 481.2M, representing about 60% of revenues, compared with approximately NIS 457.7M in the corresponding quarter of the previous year, an increase of about 5.1%. Revenues from the software and services sector in the US amounted to approximately NIS 95.2M (approximately USD 27.5M), representing about 11.8% of revenues, compared with approximately NIS 81.5M in the corresponding quarter of the previous year (approximately USD 21.8M), an increase of about 16.8%. The revenues of the marketing and deployment of software products sector in the first quarter of 2018 amounted to approximately NIS 37.5M, representing about 4.7% of revenues, compared with NIS 30.8M in the corresponding quarter of the previous year, an increase of about 21.8%. Revenues in the integration solutions and IT infrastructure sector for the quarter amounted to NIS 143.2M, representing about 17.8% of revenues, compared with approximately NIS 115.7M in the corresponding quarter of the previous year, an increase of about 23.8%. The increase in revenues is due to an increase in activity, especially in the field of cloud solutions. Revenues from the training and deployment sector amounted to approximately NIS 45.5M, representing about 5.7% of revenues, compared with approximately NIS 40.8M in the corresponding quarter of the previous year, an increase of about 11.5%.
 


 
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