SOS reports 24% decrease in three months net profit

June 4, 2020

Stationery and Office Supplies Limited (SOS) for the three months ended March 31, 2020 reported revenues of $336.90 million relative to $343.47 million booked in same period in 2019, reflecting a 2% decrease.

The Company’s cost of sales totaled $171.69 million, down 2% relative to the $175.04 million reported in 2019. As a result, gross profit went down by 2% for the three months amounting to $165.21 million relative to $168.43 million booked in the previous corresponding period.

Other income fell by 97% to close the period at $4,401 versus $130,451 reported in the same period last year. While, finance income declined 85% to close at $117,041 versus $790,947 booked in 2019’s three months period.

Administrative and general expenses totaled $86.06 million, up from the $77.19 million documented in the prior comparable period. Selling and promotional expenses grew by 1% to close at $23.31 million (2019: $23.06 million).

SOS booked impairment loss on financial assets of $1.26 million relative to a gain on financial assets of $55,607 booked March 31, 2019.

The Company’s depreciation cost amounted to $9.05 million, an increase of 7% relative to the $8.45 million recorded in 2019, while finance cost closed at $3.34 million (2019: $2.96 million).

Profit on disposal of property, plant and equipment amounted to $3.34 million (2019: $150,000).

While, loss on foreign exchange increased closing the period under review at $1.86 million (2019: $348,646).

As such, profit before taxes went down by 24% to $43.80 million versus $57.53 million earned in 2019. No taxes were incurred as such, net profit for the period totaled $43.80 million (2019: $57.53 million)

Earnings per share for the period amounted to $0.18 (2019: $0.23). The twelve-month trailing EPS amounted to $0.48. As June 3, 2020, the stock traded at $6.30.

SOS highlighted that, “In January, we exported our first container of the year with products being delivered to Grenada and had plans to an additional 2 overseas projects set to be delivered during March and April. The first 2 months of the year had SOS on target to surpass our best quarter ever which was seen in the 1st quarter of 2019.”

Furthermore, the Company mentioned that, “During the last month of the quarter (March) the effect of the virus was evident as revenues declined year on year for the month by 17%.”

Balance Sheet at a glance:

As at March 31, 2020, total assets increased by 7% to close at $938.68 million from $878.34 million twelve months earlier. The increase in total assets was primarily driven by an increase in ‘Bank and Cash’ and ‘Property, plant and equipment’ which closed at $90.95 million (2019: $54.92 million) and $400.72 million (2019: $383.07 million), respectively. ‘Prepayments’ also contributed to this increase to close at $30.16 million (2019: $19.20 million) for the period under review.

Equity attributable to stockholders of the Company as at March 31, 2020 stood at $640.45 million (2019: $539.62 million). This translated in a book value per share of $2.56 (2019: $2.16).


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