Malam Systems Ltd. (TASE: MLAM) has reported its results for the second quarter of 2006, during which the computer services company underwent organizational shocks, including the replacement of its CEO. The company posted NIS 123 million revenue for the second quarter, 6.5% less than the NIS 132 million for the corresponding quarter of 2005.
Malam’s operating revenue fell because changes in its revenue mix. 45% of revenue during the second quarter came from projects, compared with 30% in the corresponding quarter of last year. The proportion of revenue from infrastructure fell to 21% of total revenue in the second quarter from 40% in the corresponding quarter. The company said the drop in revenue from infrastructure was because of high volatility in the sector.
Despite the drop in revenue, Malam was able to demonstrate good profit performance. The company’s second quarter gross profit of NIS 24 million was the same as for the corresponding quarter, and its gross profit margin rose slightly to 19.6% of revenue from 18.6%. The company attributed the improvement to changes in its revenue mix. A reduction in sales and marketing costs boosted the company’s second quarter operating profit to NIS 11 million, 8.7% of revenue, compared with NIS 9.5 million, 7.1% of revenue, for the corresponding quarter. The company posted a net profit of NIS 5.3 million for the second quarter, 32% more than the NIS 4 million for the corresponding quarter.
Published by Globes [online], Israel business news - www.globes.co.il - on August 29, 2006
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