LUMBER reports 27% decline in six months net profit

December 14, 2022

The Lumber Depot Limited (LUMBER), for the six months ended October 31, 2022, reported revenue of $776.75 million, an increase of 2% year over year (2021: $759.94 million). Revenue for the quarter amounted to $376.87 million, relative to the $339.86 million reported in the corresponding period last year.

Cost of sales for the six months amounted to $624.53 million relative to the $584.43 million reported a year prior. Cost of sales for the quarter amounted to $306.38 million versus the $267.82 million reported in 2021. Consequently, gross profit for the period closed at $152.22 million (2021: $175.51 million). While for the quarter gross profit amounted to $70.49 million (2021: $72.04 million).

Moreover, the Company reported administrative and other expenses of $78.69 million for the period relative to the $73.29 million reported in 2021.

Operating profit for the period amounted to $77.50 million, down 23% relative to the $101.23 million reported in 2021. While for the quarter, operating profit closed at $29.37 million (2021: $28.01 million).

Finance costs and income for the period under review amounted to $4.31 million (2021: $4.84 million) and $3.32 million (2021: $1.60 million), respectively. Finance costs for the quarter totalled $2.27 million (2021: $2.22 million), whilst finance income amounted to $2.46 million (2021: $1.05 million).

Profit before taxation for the six months ended October 31, 2021 amounted to $78.20 million, down 27% year over year from the $107.20 million booked in 2021. There was no taxation for the period, as such net profit for the six months ended at $78.20 million (2021: $107.20 million). Net profit for the quarter amounted to $29.87 million relative to the $35.42 million in 2021.

Earnings per share (EPS) for the six months amounted to $0.11 (2021: $0.15). While EPS for the quarter totalled $0.04 (2021: $0.05). The trailing twelve months EPS is $0.22. The number of shares used in our calculations is 706,237,500 units. Notably, LUMBER’s stock price closed the trading period on December 14, 2022 at a price of $3.43 with a corresponding P/E ratio of 10.72 times.

LUMBER mentioned that, “Despite  the  challenges  generally  associated  with  higher  interest  rates,  supply  chain  disruptions,  high  commodity prices and a spike in logistics costs, Lumber Depot has continued to trade positively and to  deliver  strong  results.  Our  strategy is  to consistently offer competitive  prices on our products and  to  maintain our service standards and inventory availability while prioritizing  the safety of our customers  and staff.  We have been generally successful with this and in turn this has improved our standing with  key customers.”

Balance Sheet at a glance:

As at October 31, 2022, the Company reported total assets of $644.26 million (2021: $629.92 million). This represented a 2% increase attributable to a 21% increase in ‘Investments’ which closed at $143.26 million (2021: $118.58 million). Additionally, ‘Cash and Cash Equivalents’ rose by 2% to end at $117.90 million (2021: $115.06 million).

Shareholders’ Equity totalled $520.22 million (2021: $402.06 million). This resulted in a book value per share of $0.74 (2021: $0.57).


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