November 10, 2022

MailPac Group Limited (MAILPAC)

For the nine months ending September 30, 2022: –

Mailpac Group Limited (MAILPAC)’s revenues amounted to $1.22 billion for the nine months ended September 30, 2022, reflecting a 7% year over year decrease from $1.32 billion booked in 2021. While, for the third quarter, revenues closed at $413.61 million (2021: $421.99 million).

Cost of sales totalled $628.91 million (2021: $679.18 million) which resulted in gross profit of $591.46 million (2021: $638.87 million). Gross profit for the quarter amounted to $207.35 million, a 3% increase up from the $201.75 million booked in 2021. Commenting on Q3 gross profit, management stated “This increase in gross profit was delivered through a mix of organic top-line recovery coupled with tighter controls around our airfreight and clearance costs.”

Operating expenses for the period under review closed at $335.32 million, 7% higher than $312.39 million booked twelve months earlier. Management noted that, “Despite being aggressively curtailed, general inflation affected our input costs such as staff cost, rent, fuel, and utilities relative to the previous year.”  Of this:-

• • Selling and promotion totaled $48.93 million (2021: $48.17 million) as at September 30, 2022.

• • Administrative and general expenses closed at $286.38 million (2021: $264.22 million), reflecting an 8% increase year over year.

As such, operating profit for the nine months period declined to $256.14 million (2021: $326.47 million), while for the quarter, operating profit closed at $93.87 million (2021: $101.43 million).

MAILPAC recorded other income of $8.99 million relative to the $1.74 million booked in 2021, while finance cost for the nine months totaled $49.80 million (2021: $42.78 million), reflecting a 16% increase.

Mailpac Limited booked a 25% decline in profit before taxation to $215.33 million (2021: $285.43 million), while for the quarter, profit before taxation closed at $77.70 million (2021: $87.06 million).

No taxes were incurred, as such net profit closed the nine-month period at $215.33 million (2021: $285.43 million). As for the quarter, net profit totaled $77.70 million (2021: $87.06 million).

Consequently, earnings per share (EPS) was $0.09 for the nine months ended September 2022 in comparison to the $0.11 reported in September 2021. For the quarter, EPS closed at $0.03 (2021: $0.03). The trailing twelve months EPS amounted to $0.13. The number of shares used in this calculation was 2,500,000,000 shares. MAILPAC traded on November 9, 2022, at $2.10 with a corresponding P/E of 15.91 times.

MAILPAC noted, “Despite the performance anomalies created from the highs and lows of Covid, we reiterate confidence in our strategy of not building our business for short-term economic and social swings, but for long-term sustainable growth. We are confident that e-commerce will ultimately emerge as the primary form of non-grocery and household retail in the region, and Mailpac is best positioned to benefit from that trend as the leading provider in the region.”

Balance Sheet at a Glance:

As at September 30, 2022, total assets closed at $674.91 million, 1% higher than the $667.90 million booked for September 2021. Notably, ‘Deposit on Asset’ was the main contributor to the increase, amounting to $42.41 million (2021: nil). This increase was tempered by the $52.50 million decline in ‘Cash and cash equivalents”.

Shareholder’s equity increased to $584.88 million from $582.15 million resulting in a book value of $0.23 (2021: $0.23).

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