May 8, 2020
Seprod Limited (SEP), for the three months ended March 31, 2020, posted revenue totalling $9.14 billion compared to $8.59 billion recorded for the same period of the prior financial year, representing a 6% increase year over year. The Manufacturing Division recorded a 17% increase in revenue to close at $5.21 billion (2019: $4.44 billion), while the Distribution Division increased by 14% closing at $6.90 billion (2019: $6.07 billion).
Direct expenses increased by 1% from $6.31 billion in 2019 to $6.38 billion in 2020, resulting in gross profit increasing by 21% to close at $2.76 billion (2019: $2.28 billion).
Other operating income totalled $123.51 million compared to $295.15 million recorded in the same period of 2019.
Other operating expenses increased by 2% to close the first quarter of 2020 at $1.78 billion (2019: $1.74 billion).
As such, operating profit grew 32%, moving from $834.83 million in the first quarter of 2019 to $1.11 billion booked in the period under review.
Finance costs amounted to $279.94 million for the three months ended March 31, 2020 (2019: $287.38 million).
Share of results of joint venture amounted to $29.98 million (2019: $18.56 million).
Profit before taxation increased to $855.04 million for the period under review, an increase of 51% on $566.01 million reported in the same quarter last year.
After incurring taxes of $207.70 million (2019: $115.38 million), the Company booked net profit from continuing operations of $647.34 million (2019: $450.63 million). In addition, net loss from discontinued operations closed at $14.62 million (2019: $138.67 million).
As such, Seprod reported net profit of $632.72 million, a growth of 103% relative to last year’s corresponding period of $311.96 million.
Total comprehensive income for the quarter amounted to $655.42 million compared to $280.92 million booked for the first quarter of 2019. SEP noted, “due largely to efforts made in prior years to strengthen the business fundamentals. These efforts include consolidation of the dairy factories, increasing exports and expanding the distribution footprint through the acquisition of the Facey Consumer business.”
Management also noted, “The sugar manufacturing operation was discontinued in July 2019. As required by accounting standards, the losses from this operation are presented as a single line item in the Statement of Comprehensive Income until the operation has been disposed of (losses for historical periods have also been re-presented in this manner for comparability).”
Consequently, earnings per share (EPS) for the three months ended March 31, 2020 amounted to $0.86 versus $0.43 booked in the corresponding period of 2019. The twelve months trailing EPS is $1.76. SEP last traded on May 08, 2020 at $46.69.
Balance sheet at a Glance:
As at March 31, 2020, the Company’s Total Assets decreased by 1% to $35.81 billion from $36.05 billion a year ago. The decrease in assets was largely due to decreases in ‘Receivables’ and ‘Intangible Assets’ which closed at $6.13 billion (2019: $7.67 billion) and $9.35 billion (2019: $9.60 billion), respectively. However, this was offset by increases in ‘Right of use asset’ which closed at $1.01 billion (2019: nil) and ‘Inventories’ which closed at $5.95 billion (2019: $5.82 billion).
Shareholders’ Equity for the period ended at $15.63 billion relative to $16.07 billion last year, indicating a 3% decline. This translated into a book value per share of $21.30 (2019: $21.91).
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