Pansoft Co. Ltd. (PSOF), an ERP software service provider for the oil and gas industry in China, posted a 94% rise in second-quarter profit, on 47% rise in revenues.
Net income for the quarter rose 94% to $1.9 million from year-ago $0.995 million, and earnings per share rose 64% to $0.36 from $0.22.
Revenues rose 47% to $4.9 million from $3.3 million last year, mainly due to a significant increase in the number and value of contracts.
The company has two major long-term clients, Sinopec and PetroChina -- major oil corporations in China. The company has in fact, dedicated two business units called Sinopec services and PetroChina services to cater to these oil giants, as part of a recent corporate restructuring effort.
To be more consistent with the purchasing cycle of its major customers, the company has changed its fiscal year end to June 30 from December 31.
China has now become a sought-after destination for the multinational companies looking to expand operations. The increasing global operations in China are prompting the country's businesses to upgrade IT systems, especially the ERP or Enterprise Resource Planning platforms, positioning companies like Pansoft for growth.
Looking ahead, Pansoft expects to achieve 40% organic growth in revenue year-over-year for the fiscal year ending in June 30, 2010.
With about $14.7 million in cash or cash equivalent on its balance sheet, the company also plans to focus aggressively on potential acquisitions to expand into additional industries.
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