SOS reports 75% decline in year end net profit

March 3, 2021

Stationery & Office Supplies Ltd. (SOS), for the year ended December 31, 2020, reported year end revenue of $972.32 million relative to $1.22 billion in 2019, a 20% decrease, while for the fourth quarter revenues moved from $284.77 million in 2019 to $260.64 million in 2020.

The company’s cost of sales totaled $526.89 million down 17% relative to the $635.37 million reported in 2019. As a result, gross profit fell by 24% amounting to $445.43 million relative to the $582.62 million booked in 2019, while for the fourth quarter gross profit moved from $116.44 million in 2019 to $101.05 million in 2020.

Administrative expenses totaled $286.67 million down 6% compared to the $306.18 million booked in 2019, while selling and promotion expenses decreased by 20% closing the period at $74.94 million relative to the $93.21 million reported the prior year.

The company’s depreciation cost amounted to $28.42 million an increase of 9% relative to the $26.18 million incurred in 2019, while finance cost decrease by 2% to close at $14.91 million (2019: $15.26 million).

Profit before taxes decreased by 74% amounting to $35.25 million relative to the $136.70 million earned in 2019. While, for the quarter, profit before tax closed at $6.62 million versus a profit before tax of $22.69 million reported in the prior comparable quarter.

After tax charge of $2.16 million (2019: $2.13 million), net profit for the year totaled $33.09 million a 75% reduction relative to the $134.56 million reported in 2019. Net Profit for the fourth quarter totalled $4.46 million (2019: $20.56 million).

Earnings per share for the year amounted to $0.13 (2019: $0.54), while EPS for the quarter totaled $0.02 (2019: $0.08). The number of shares used in our calculations amounted to 250,120,500 units.  SOS’s stock last traded on March 2, 2021 at $4.53 with a corresponding P/E ratio of 34.24 times.

Balance Sheet Highlights:

Total Assets decreased by 2% or $19.03 million to close at $888.02 million as at December 31, 2020 from $907.04 million the year prior. The movement was due to a 29% and 7% decrease in ‘Trade and other receivables’ and ‘Inventories’ which closed at $99.39 million (2019: $140.41 million) and $232.65 million (2019: $249.05 million) respectively. This was partially tempered by a 55% increase in ‘Bank and Cash’ which amounted to $96.90 million (2019: $62.54 million).

Equity attributable to stockholders of the company as at December 31, 2020 stood at $609.73 million (2019: $596.65 million) resulting in book value per share of $2.44 (2019: $2.39).




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