SOS reports 24% increase in nine months net profit

November 12, 2019

Stationery and Office Supplies Limited (SOS) for the nine months period reported revenues of $933.22 million relative to $801.44 million in 2018, a 16% increase. For the third quarter, revenues grew by 5% to close the quarter at $294.67 million (2018: $281.51 million). The company highlighted that, “sales of SEEK product increased from $25M to $33M, a 30% increase during the back to school period.”

The Company’s cost of sales totalled $467.04 million, up 18% relative to the $395.33 million reported in 2018. Cost of sales for the quarter rose by 11% to $150.65 million (2018: $135.71 million). As a result, gross profit grew by 15% for the nine months amounting to $466.18 million relative to $406.12 million booked in 2018, while gross profit for the quarter totalled $144.02 million (2018: $145.81 million).

Administrative expenses totalled $242.38 million up 11% from $219.27 million booked in 2018, while selling and promotion expenses grew by 10% closing the period at $70.74 million relative to the $64.58 million reported in 2018. For the quarter, Administrative expenses went up by 10% to $84.77 million (2018: $76.90 million), while selling and promotion expenses closed at $22.41 million (2018: $20.13 million).

The Company’s depreciation cost amounted to $25.57 million, an increase of 28% relative to the $19.92 million incurred in 2018, while finance cost closed at $11.23 million (2018: $9.17 million). Finance income ended the nine month period at $806,320 (2018: nil). Loss on Foreign exchange totalled $3.91 million compared to $3.90 million booked for the corresponding period last year.

Profit before taxes grew by 24% amounting to $114.01 million relative to the $91.64 million earned in 2018. For the quarter, there was a 37% decline to $22.36 million (2018: $35.47 million).

SOS reported nil for tax expense compared to $60,000 for the same period of 2018. As such, net profit for the period totalled $114.01 million, an increase of 24% relative to the $91.58 million reported in 2018. Net profit for the quarter amounted to $22.36 million, down by 37% from the $35.47 million earned in the previous corresponding quarter.

Earnings per share for the period amounted to $0.46 (2018: $0.37), while EPS for the quarter totalled $0.09 (2018: $0.14). The twelve-month trailing EPS amounted to $0.46. As at November 12, 2019, the stock traded at $12.50.

Balance Sheet at a glance:

Total Assets increased by 6% to close at $888.10 million as at September 30, 2019 relative to $839.92 million reported twelve months earlier. The increase in total assets was primarily driven by increases in ‘Bank and cash’ which rose 80% to $87.47 million (2018: $48.67 million. ‘Inventories’ also contributed to the increase with an 11% growth to $230.55 million (2018: $206.90 million). ‘Trade and other receivables’ increase 7% to $159 million (2018: $148.01 million)

Equity attributable to stockholders of the Company as at September 30, 2019 stood at $596.10 million (2018: $495.33 million). This translated in a book value per share of $2.38 (2018: $1.98).


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