May 5, 2021

Seprod Limited (SEP), for the three months ended March 31, 2021, posted revenue totalling $9.58 billion compared to $9.14 billion recorded for the same period of the prior financial year, representing a 5% increase year over year. The Manufacturing Division recorded a 1% increase in revenue to close at $5.24 billion (2020: $5.21 billion), while the Distribution Division increased by 7% closing at $7.40 billion (2020: $6.90 billion).

Direct expenses increased by 8% from $6.38 billion in 2020 to $6.90 billion in 2021, resulting in gross profit declining by 3% to close at $2.68 billion (2020: $2.76 billion).

Other operating income totalled $128.04 million compared to $123.51 million recorded in the same period of 2020.

Other operating expenses increased by 5% to close the first quarter of 2021 at $1.86 billion (2020: $1.78 billion).

As such, operating profit fell 14%, moving from $1.11 billion in the first quarter of 2020 to $945.16 million booked in the period under review.

Finance costs amounted to $267.49 million for the three months ended March 31, 2021 (2020: $279.94 million).

Share of results of joint venture amounted to $14.13 million (2020: $29.98 million).

Profit before taxation decreased to $691.80 million for the period under review, a 19% contraction relative to the $855.04 million reported in the same quarter last year.

After incurring taxes of $125.15 million (2020: $207.70 million), the Company booked net profit from continuing operations of $566.65 million (2020: $647.34 million). In addition, net loss from discontinued operations closed at $20.34 million (2020: $14.62 million).

As such, Seprod reported net profit of $546.31 million, a 14% decline relative to last year’s $632.72 million. Management stated, “The decreased profitability was primarily driven by an increase in our operating costs and by supply chain challenges. We are closely examining our cost structure and are pushing to improve productivity to help offset the higher cost that we have experienced in Q1.”

Total comprehensive income for the quarter amounted to $602.43 million compared to $655.42 million booked for the first quarter of 2020.

Consequently, earnings per share (EPS) for the three months ended March 31, 2021 amounted to $0.74 versus $0.86 booked in the corresponding period of 2020. The twelve months trailing EPS is $3.80. SEP last traded on May 04, 2021 at $79.77 with a corresponding P/E ratio of 21.01 times.

Balance Sheet at a Glance:

As at March 31, 2021, the Company’s Total Assets increased by 6% to $38.08 billion from $35.81 billion a year ago. The growth in assets was largely due to increases in ‘Cash and Bank Balances’ and ‘Receivables’ which closed at $3.13 billion (2020: $1.11 billion) and $6.92 billion (2020: $6.13 billion) respectively. However, this was tempered by a 60% declined in ‘Right Of Use Assets’ which closed at $398.78 million (2020: $1.01 billion).

Shareholders’ Equity for the period ended at $17.28 billion relative to $15.63 billion last year, indicating an 11% increase. This translated into a book value per share of $23.55 (2020: $21.30).

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