Netsol Planning Layoffs Despite Huge Profits During COVID-19 Pandemic

Netsol Planning Layoffs Despite Huge Profits During COVID-19 Pandemic
Netsol Planning Layoffs Despite Huge Profits During COVID-19 Pandemic

One of Pakistan’s most prominent software houses, NetSol Technologies Limited, has announced its financial results for the third quarter that ended March 31st, 2019.

The company has reported an unconsolidated profit of Rs. 201.10 million, up by 10.16% as compared with a profit of Rs. 182.56 million recorded in the same period due to an unprecedented increase in other income.

This takes the nine months (Jul-Mar) profits of the company at Rs. 151.23 million, down by 82.20% as compared with Rs. 849.53 million recorded in the corresponding period of the last year.


Netsol Plans Layoffs & Pay Cuts Amid Coronavirus Crisis

Third-quarter (Jan-Mar)

NetSol posted a 19.60% decrease in its sales in the third quarter. It was able to achieve sales of Rs. 1.15 billion as compared to Rs. 1.43 billion last year. The generation of revenue for the current quarter was associated with services and maintenance revenue streams.

However, service revenue clocked in at Rs. 712 million as compared to Rs. 879 million during the corresponding period of the previous fiscal year. In addition to it, maintenance revenue grew from Rs. 251 million to Rs. 447 million during the current quarter. The increase in maintenance revenue is mainly associated with different customers going into the maintenance phase after their successful implementation and “Go Live”, said the company in its released report.

The cost of sales of the company came in at Rs. 799 million, decreasing by 8.60% as compared to Rs. 874 million recorded in the same period last year.

During the quarter, administrative expenses increased to Rs. 194.75 million from Rs. 185.52 million. Other income saw an unprecedented increase to Rs. 280.49 million as compared with Rs. 28.16 million, up by 9 times.

The finance cost also saw an increase of 47.80% to Rs. 13.36 million as compared to Rs. 9.04 million.

Other operating expenses soared massively to Rs. 95.36 million, up 42% as compared to Rs. 67.23 million posted last year. This was due to currency exchange loss resulting from appreciation in Pakistani Rupee against the US dollar during the quarter. It also reported a share of loss of associate of Rs. 8.10 million.

Earnings per share increased to Rs. 2.24 from Rs. 2.23 in the quarter.

“Like all businesses across the globe, NETSOL has also been impacted by the current pandemic. While demos will continue to take place, there might be delays in further materialization due to the current situation,” said the company in the released report submitted to the PSX.

It further noted that the next few weeks will be important in determining what direction things are heading in.

At the time of filing this report, NetSol’s shares at the PSX were trading at Rs. 41.50, down by Rs. 0.87 or -2.05% with a turnover of 498,000 shares.


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