MAILPAC reports 16% decline in nine months net profit

November 15, 2021

Mailpac Group Limited (MAILPAC)’s revenues amounted to $1.32 billion for the nine months ended September 30, 2021, reflecting a 9% year over year increase from $1.21 billion booked in 2020. While, for the quarter, revenues closed at $421.99 million (2020: $476.54 million).

Cost of sales totalled $679.18 million (2020: $623.04 million) which resulted in gross profit of $638.87 million (2020: $584.35 million). Gross profit for the quarter amounted to $201.75 million, 16% down from $240.46 million booked in 2020.

Operating expenses for the period under review closed at $312.39 million, 37% higher than $228.36 million booked twelve months earlier.  According to management the growth in expenses “reflects the cost of our enhanced processing capacity, improved customer service capacity, additional delivery store locations, and amplified brand marketing.” Of this,

  • Selling and promotion totaled $48.17 million (2020: $29.75 million) as at September 30, 2021.
  • Administrative and general expenses closed at $264.22 million (2020: $198.61 million), reflecting a 33% year over year increase.

As such, operating profit for the nine months period summed to $326.47 million (2020: $355.99 million) while for the quarter, operating profit closed at $101.44 million (2020: $156.88 million).

MAILPAC recorded other income of $1.74 million, 87% down from $13.41 million booked in 2020, while finance cost for the nine months totaled $42.78 million (2020: $30.52 million), reflecting a 40% increase.

Consequently, Mailpac Limited booked a 16% decrease in profit to $285.43 million (2020: $338.88 million), while for the quarter, profit closed at $87.06 million (2020: $149.14 million).

Earnings per share (EPS) amounted to at $0.11 for the nine months ended September 2021 in comparison to September 2020 $0.14. For the quarter, EPS closed at $0.03 (2020: $0.06). The trailing twelve months EPS amounted to $0.16. The number of shares used in this calculation was 2,500,000,000 shares. MAILPAC traded on November 12, 2021, at $3.60 with a corresponding P/E of 23.10 times.

Balance Sheet at a Glance:

As at September 30, 2021, total assets closed at $667.90 million, 1% higher than $662.10 million booked for September 2020. Notably, ‘cash and cash equivalents’ mainly oppose the growth by declining to $260.13 million (2020: $309.70 million). while, ‘Property, plant and equipment’ and ‘Right of use assets’ increased to $82.84 million (2020: $37.01 million) and $32.09 million (2020: $13.79 million), respectively.

Shareholder’s equity declined to $582.15 million from $467.52 million resulting in a book value of $0.23 (2020: $0.19).


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