August 26, 2024

Stationery and Office Supplies Limited (SOS)

Unaudited financials for the six months ended June 30, 2024:

Stationery and Office Supplies Limited (SOS) for the six months ended June 30, 2024, reported an 8% decrease in revenue totalling $957.62 million compared to $1.04 billion in the corresponding period last year. Revenue for the second quarter had an 18% decrease to close at $432.82 million compared to $525.23 million for the comparable quarter of 2023.

The Cost Of Sales amounted to $413.73 million (2023: $486.50 million), a decrease of 15% year over year. This reflects the company’s commitment to managing costs effectively. Consequently, gross Profit decreased by 3% to $543.90 million compared to $557.92 million for the six months ended June 30, 2023. The company booked a gross profit of $253.17 million for the second quarter versus $287.46 million reported for the similar quarter of 2023.

Administrative and general expenses increased by 21% to close at $290.99 million (2023: $240.03 million), while Selling And Promotional Costs increased by 18% from $68.29 million in 2023 to $80.31 million in the period under review. These strategic decisions were made to ensure the company’s long-term growth trajectory. Depreciation and amortization amounted to $19.84 million for the six months ended June 30, 2024 relative to the $18.01 million reported in 2023.

Operating Profit for the six months ended June 30, 2024, amounted to $152.76 million, a 34% decrease relative to $231.25 million reported in 2023. Operating Profit for the second quarter amounted to $44.57 million (2023: $119.56 million). Finance costs totalled $1.22 million, a 66% decrease from last year’s corresponding period. (2023: $3.55 million). Profit before tax for the six months ended June 30, 2024, amounted to $156.66 million, a 32% decrease relative to $229.34 million reported in 2023. Profit before tax for the second quarter amounted to $47.41 million (2023: $118.97 million).

Loss on foreign exchange for the six months ending June 30, 2024, increased 105% to $1.00 million (2023: $489,747). This increase was primarily due to a year-over-year depreciation of the JMD against the USD and the cost of acquiring foreign exchange in regional markets as the company expanded.
Income Tax Expenses decreased by 35% to $19.60 million (2023: $30.25 million), while Income Tax Expenses for the quarter totalled $5.93 million relative to the $14.00 million booked in the prior year’s quarter. Net Profit for the period totalled $137.07 million, relative to the $199.09 million reported twelve prior. For the quarter, Net Profit amounted to $41.49 million compared to the $104.97 million reported in 2023.
Consequently, Earnings Per Share for the six months amounted to $0.06 (2023: EPS: $0.09), while Earnings Per Share for the quarter totalled $0.02 (2023: EPS: $0.05). The twelve-month trailing EPS was $0.10, and the number of shares used in these calculations was 2,251,084,500.

Notably, SOS’s stock closed the trading period on August 23, 2024, at $1.70, with a corresponding P/E ratio of 17.72x.

Balance Sheet Highlights:

The company’s assets totalled $1.86 billion (2023: $1.63 billion). The increase in the company’s total asset base is ascribed to movements in the “Property, plant, and equipment,” representing a 32% YoY increase, closing the period at $864.19 million (2023: $654.96 million). There was also a 298% YoY increase in “Right of use asset” ending the period at $32.52 million (2023: $8.16 million), a 14% YoY increase in “Prepayments” ending the period at $82.44 million (2023: $72.14 million), and a 3% YoY increase in “Inventories” closing at $361.19 million (2023: $349.55 million).

Shareholder’s equity was $1.47 billion (2023: $1.30 billion), representing a book value per share of $0.65 (2023: $0.58).

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