February 10, 2021

Seprod Limited (SEP) posted revenue totalling $37.74 billion compared to $32.69 billion recorded for the same period of the prior financial year, representing a 15% increase year over year. Revenue for the quarter amounted to $9.08 billion relative to the $7.90 billion reported in 2019. The Company stated, “This ended a good year that validated deliberate efforts made by the Board in prior years to focus on execution, a strong innovation pipeline and diversification of our revenue pillars. The pandemic has brought many challenges, but it has also offered opportunities for us to relook at how we operate, accelerated our digitization process and is driving us to expand our innovation pipeline to include healthier options.”

Cost of Sales increased by 6% from $23.89 billion to $27.25 billion, resulting in gross profit increasing by 19% to close at $10.48 billion (2019: $8.80 billion). For the quarter, gross loss closed the period at $112.41 million when compared to a gross loss of $223.33 million booked the previous comparable period.

Finance and Other operating income totalled $2.50 billion compared to $1.31 billion in 2019, an increase of 90% year over year.

Selling expense amounted to $469.54 million (2019: $449.96 million).

Administrative Expenses amounted to $7.80 billion (2019: $6.89 billion).

Net Impairment Losses on Trade Receivables totalled $31.09 million versus a gain of $25 million in 2019.

As such, Operating profit grew 67%, moving from $2.80 billion in 2019 to $4.68 billion to close the year end period of 2020. For the quarter, operating profit totalled $869.70 million (2019: $593.44 million).

Finance costs amounted to $1.27 billion (2019: $1.472 billion), a 14% decrease year over year.

Share of loss of Joint Venture amounted to $5.24 million versus a profit of $57.71 million booked for the year ended December 31, 2019.

Profit before taxation increased to $3.41 billion in 2020, a 146% increase on $1.39 billion reported a year prior.

Seprod reported net profit from continuing operations of $2.85 billion (2019: $1.71 billion), an increase of 67% year over year. The company noted, “Profit from continuing operations for the year includes a one-off gain of J$762 million from the sale of a property that the Group was able to dispose of due to the consolidation and relocation of a distribution operation.”

Net profit from discontinued operations totaled $23.03 million versus the net loss of $732.31 million reported in 2019.

As a result, Net profit for the period amounted to $2.87 billion, 195% over the $973.33 million reported in the prior year. For the quarter, net profit closed at $389.29 million (2019: $595.59 million).

Total comprehensive income for the year closed at $2.97 billion (2019: $1.07 billion).

Consequently, earnings per share (EPS) for the year ended December 31, 2020 amounted to $3.92 relative to $1.33 for the corresponding period in 2019. Earnings per share for the quarter amounted to $0.53 (2019: $0.81). The number of shares used in our calculations amounted to 733,546,855 units. SEP last traded on April 01, 2021 at $73.01 with a corresponding P/E ratio of 18.65 times.

The Company highlighted that “The pandemic has had a negative impact on our operations, but the Group’s diversified portfolio has certainly allowed it to be resilient up to this point. We have gone above and beyond the health protocol guidelines of the Ministry of Health and Wellness to ensure the safety of everyone that has to interface with the business and to ensure supply continuity to our customers and consumers.”

Balance Sheet at a Glance:

As at December 31, 2020, the Company’s Total Assets increased by 4% to $38.08 billion from $36.50 billion a year ago. Non-current assets closed at $21.04 billion (2019: $22.07 billion) while current assets amounted to $17.04 billion (2019: $14.43 billion). The decrease in Non-current assets was mainly attributable to a 62% decrease in ‘Right of use assets’ which ended at $397.49 million (2019: $1.04 billion). Additionally, the increase in current assets was mainly due to a 9% increase in “Inventories” which amounted to $7.56 billion relative to the $6.91 billion reported twelve months prior.

Shareholders’ Equity as at December 31, 2020 amounted to $16.89 billion relative to $14.97 billion in 2019, indicating a 13% increase. This translated into a book value per share of $23.03 (2019: $23.41).

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