SML reports 87% decline in year end net profit

February 14, 2020

Stanley Motta Limited (SML) for the year ended December 31, 2019, booked a 55% increase in revenue to total $418.56 million compared to $269.76 million for the same period in 2018. SML indicated that, “This is due to the 100% occupancy of all rentable space for the full year”. For the quarter, revenue increased by $8.49 million to $106.05 million in 2019 compared to $97.56 million the previous year.

Administrative expenses amounted to $111.42 million (2018: $117.04 million), for the quarter, administrative expenses declined by $1.46 million closing at $34.33 million (2018: $35.78 million). Whereas, other operating income totalled $88,000 (2018: $37,000), for the quarter operating income closed the period at $20,000 (2018: $24,000).

This translated into operating profit surging to $290.93 million when compared to last period’s $156.59 million. For the quarter, operating profit closed the period at $88.62 million relative to an operating profit of $65.63 million in the prior corresponding quarter.

Finance costs of $47.99 million (2018: $59.22 million) was recorded, while revaluation gain on investment property of $43.24 million (2018: $1.90 billion) was booked. For the quarter, finance cost and revaluation gain on investment property closed the period at $13.56 million (2018: $21.81 million) and $43.24 million (2018: $290.03 million) respectively.

Profit before tax declined to $286.18 million for the year ended December 31, 2019 relative to $1.99 billion in 2018. As for the quarter, profit before tax closed the period at $118.30 million versus $333.85 million in the prior comparable quarter.

Net profit for the period totalled $282.36 million (2018: $1.99 billion), while for the quarter net profit of $117.43 million (2018: $331.74 million) was recorded.

Earnings per share (EPS) for the period totalled $0.37 (2018: $2.64). EPS for the quarter amounted to $0.15 (2018: $0.44). The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on February 13, 2020 at $5.

SML noted that, “Revenue for 2020 is expected to remain stable excluding significant fluctuations in the foreign exchange and property revaluations. The collection of rent in US dollars is expected to continue on a timely basis.”

Balance Sheet at a glance:

As at December 31, 2019, total assets amounted to $4.86 billion, up from $4.83 billion in 2018. The increase in total assets was as a result of the increase in ‘Property, Plant & Equipment’ which advanced from $18.95 million in 2018 to $34.97 million in 2019. ‘Inventories’ and ‘Investment Property’ also reported growth closing at $635,000 (2018: $544,000) and $4.78 billion (2018: $4.69 billion), respectively.

Shareholders’ Equity of $4.01 billion was reported (2018: $3.89 billion) which resulted in a book value per share of $5.29 (2018: $5.14).

Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. 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.