November 16, 2020
Stationary & Office Supplies Ltd (SOS)
Financial Statements for the Nine Months Ended September 30, 2020:
Stationery and Office Supplies Limited (SOS) for the nine months period reported revenues of $711.68 million relative to $933.22 million in 2019, a 24% decrease. For the third quarter, revenues fell by 19% to close the quarter at $239.57 million (2019: $294.67 million). The company highlighted that, “During the third quarter of 2020, SOS was again able to post a profit and had no months in which a loss was experienced, even though the number of confirmed average daily cases of Covid19 was higher than that experienced in the second quarter.”
The Company’s cost of sales totalled $367.30 million, down 21% relative to the $467.04 million reported in 2019. Cost of sales for the quarter fell by 18% to $122.95 million (2019: $150.65 million). As a result, gross profit declined by 26% for the nine months amounting to $344.38 million relative to $466.18 million booked in 2019, while gross profit for the quarter totalled $116.62 million (2019: $144.02 million).
Administrative expenses totalled $219.78 million down 9% from $242.38 million booked in 2019, while selling and promotion expenses fell by 22% closing the period at $54.90 million relative to the $70.74 million reported in 2019. For the quarter, Administrative expenses declined by 7% to $78.89 million (2019: $84.77 million), while selling and promotion expenses closed at $16.97 million (2019: $22.41 million).
The Company’s depreciation cost amounted to $26.30 million, an increase of 3% relative to the $25.57 million incurred in 2019, while finance cost closed at $10.64 million (2019: $11.23 million). Finance income ended the nine-month period at $149,146 (2019: $806,315). Loss on Foreign exchange totalled $6.15 million compared to $3.91 million booked for the corresponding period last year. Profit on disposal of PPE amounted to $3.34 million (2019: $150,000).
Profit before taxes fell by 75% amounting to $28.63 million relative to the $114.01 million earned in 2019. For the quarter, there was a 70% decline to $6.80 million (2019: $22.36 million).
No tax expense was recorded, as such, net profit for the period totalled $28.63 million, a 75% contraction relative to the $114.01 million reported in 2019. Net profit for the quarter amounted to $6.80 million, relative to the $22.36 million earned in the previous corresponding quarter.
Total comprehensive income for the period ended at $28.63 million relative to the $114.01 million booked the prior year. Total comprehensive income for the quarter totalled $6.80 million compared to the $22.36 million in 2019.
Earnings per share for the period amounted to $0.11 (2019: $0.46), while EPS for the quarter totalled $0.03 (2019: $0.09). The twelve-month trailing EPS amounted to $0.20. As at November 13, 2020, the stock traded at $4.55.
Balance Sheet Highlights:
Total Assets increased by 2% to close at $905.10 million as at September 30, 2020 relative to $888.10 million reported twelve months earlier. The increase in total assets was primarily driven by increases in ‘Bank and cash’ which rose 28% to $111.85 million (2019: $87.47 million). ‘Prepayments’ also contributed to the increase with an 120% growth to $35.96 million (2019: $16.34 million).
Equity attributable to stockholders of the Company as at September 30, 2020 stood at $625.28 million (2019: $596.10 million). This translated in a book value per share of $2.50 (2019: $2.38).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.
