November 16, 2020

Stationary & Office Supplies Ltd (SOS)

Financial Statements for the Nine Months Ended September 30, 2020:

Stationery and Office Supplies Limited (SOS) for the nine months period reported revenues of $711.68 million relative to $933.22 million in 2019, a 24% decrease. For the third quarter, revenues fell by 19% to close the quarter at $239.57 million (2019: $294.67 million). The company highlighted that, “During the third quarter of 2020, SOS was again able to post a profit and had no months in which a loss was experienced, even though the number of confirmed average daily cases of Covid19 was higher than that experienced in the second quarter.”

The Company’s cost of sales totalled $367.30 million, down 21% relative to the $467.04 million reported in 2019. Cost of sales for the quarter fell by 18% to $122.95 million (2019: $150.65 million). As a result, gross profit declined by 26% for the nine months amounting to $344.38 million relative to $466.18 million booked in 2019, while gross profit for the quarter totalled $116.62 million (2019: $144.02 million).

Administrative expenses totalled $219.78 million down 9% from $242.38 million booked in 2019, while selling and promotion expenses fell by 22% closing the period at $54.90 million relative to the $70.74 million reported in 2019. For the quarter, Administrative expenses declined by 7% to $78.89 million (2019: $84.77 million), while selling and promotion expenses closed at $16.97 million (2019: $22.41 million).

The Company’s depreciation cost amounted to $26.30 million, an increase of 3% relative to the $25.57 million incurred in 2019, while finance cost closed at $10.64 million (2019: $11.23 million). Finance income ended the nine-month period at $149,146 (2019: $806,315). Loss on Foreign exchange totalled $6.15 million compared to $3.91 million booked for the corresponding period last year. Profit on disposal of PPE amounted to $3.34 million (2019: $150,000).

Profit before taxes fell by 75% amounting to $28.63 million relative to the $114.01 million earned in 2019. For the quarter, there was a 70% decline to $6.80 million (2019: $22.36 million).

No tax expense was recorded, as such, net profit for the period totalled $28.63 million, a 75% contraction relative to the $114.01 million reported in 2019. Net profit for the quarter amounted to $6.80 million, relative to the $22.36 million earned in the previous corresponding quarter.

Total comprehensive income for the period ended at $28.63 million relative to the $114.01 million booked the prior year. Total comprehensive income for the quarter totalled $6.80 million compared to the $22.36 million in 2019.

Earnings per share for the period amounted to $0.11 (2019: $0.46), while EPS for the quarter totalled $0.03 (2019: $0.09). The twelve-month trailing EPS amounted to $0.20. As at November 13, 2020, the stock traded at $4.55.

Balance Sheet Highlights:

Total Assets increased by 2% to close at $905.10 million as at September 30, 2020 relative to $888.10 million reported twelve months earlier. The increase in total assets was primarily driven by increases in ‘Bank and cash’ which rose 28% to $111.85 million (2019: $87.47 million). ‘Prepayments’ also contributed to the increase with an 120% growth to $35.96 million (2019: $16.34 million).

Equity attributable to stockholders of the Company as at September 30, 2020 stood at $625.28 million (2019: $596.10 million). This translated in a book value per share of $2.50 (2019: $2.38).

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