May 16, 2022

Seprod Limited (SEP), for the three months ended March 31, 2022, posted revenue totalling $11.81 billion compared to $$9.58 billion recorded for the same period of the prior financial year, representing a 23% increase year over year. The Manufacturing Division recorded a 37% increase in revenue to close at $7.21 billion (2021: $5.24 billion), while the Distribution Division increased by 14% closing at $8.45 billion (2021: $7.40 billion). SEP noted that, “The revenue growth was driven by robust export growth, improved product mix and price increases.”

Direct expenses increased by 29% from $6.90 billion in 2021 to $8.87 billion in 2022, despite this increase gross profit rose by 9% to close at $2.94 billion (2021: $2.68 billion).

Other operating income totalled $104.75 million compared to $128.04 million recorded in the same period of 2021.

Other operating expenses increased by 10% to close the first quarter of 2022 at $2.04 billion (2021: $1.86 billion).

As such, operating profit rose 5%, moving from $945.16 million in the first quarter of 2021 to $996.83 million booked in the period under review.

Finance costs amounted to $263.12 million for the three months ended March 31, 2022 (2021: $267.49 million).

Share of results of joint venture amounted to $5.92 million (2021: $14.13 million).

Profit before taxation grew to $739.63 million for the period under review, a 7% uptick relative to the $691.80 million reported in the same quarter last year.

After incurring taxes of $110.20 million (2021: $125.15 million), the Company booked net profit from continuing operations of $629.43 million (2021: $566.65 million). In addition, net loss from discontinued operations closed at $34.23 million (2021: $20.34 million).

As such, Seprod reported net profit of $595.21 million, a 9% increase relative to last year’s $546.31 million.

Total comprehensive income for the quarter amounted to $614.28 million compared to $602.43 million booked for the first quarter of 2021.

Consequently, earnings per share (EPS) for the three months ended March 31, 2022 amounted to $0.81 versus $0.74 booked in the corresponding period of 2021. The twelve months trailing EPS is $2.78. SEP last traded on May 16, 2022 at $69.15 with a corresponding P/E ratio of 24.84 times.

Management noted, “Overall, the global market is highly volatile and there is downside risk of higher input prices and availability, which we have no control over. The cost of key raw materials are at a 10 year high levels and is showing very little sign of retreating.”

Balance Sheet at a Glance:

As at March 31, 2022, the Company’s Total Assets increased by 20% to $45.79 billion from $38.08 billion a year ago. The growth in assets was largely due to increases in ‘Fixed Assets’ and ‘Inventories’ which closed at $14.03 billion (2021: $7.05 billion) and $9.15 billion (2021: $6.19 billion) respectively. However, this was tempered by a 64% decline in ‘Cash and Bank Balances’ which closed at $1.14 billion (2021: $3.13 billion).

Shareholders’ Equity for the period ended at $24.06 billion relative to $17.28 billion last year, indicating a 39% increase. This translated into a book value per share of $32.80 (2021: $23.55).

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