November 7, 2022

Stationery and Office Supplies Limited (SOS) for the nine months period reported revenues of $1.32 billion relative to $809.33 million in 2021, a 63% increase. For the third quarter, revenues rose by 83% to close at $473.11 million (2021: $258.46 million). The company highlighted that, “The period between July to September 2022 produced the highest revenues in a quarter in the company’s 57-year history.”

The Company’s cost of sales for the nine months totalled $646.35 million, up 66% relative to the $389.65 million reported in 2021. Cost of sales for the quarter grew by 79% to $230.14 million (2021: $128.90 million). Gross profit for the period rose by 61% amounting to $674.46 million relative to $419.68 million booked in 2021, while gross profit for the quarter improved to $242.97 million (2021: $129.56 million).

Administrative expenses totalled $314.10 million up 28% from $244.90 million booked in 2021, while selling and promotion expenses also grew by 58% closing the period at $96.40 million relative to the $60.84 million reported in 2021. For the quarter, Administrative expenses increased by 37% to $111.93 million (2021: $81.99 million), while selling and promotion expenses closed at $35.84 million (2021: $17.80 million), up 101% year over year.

The Company’s depreciation cost amounted to $26.45 million, a 7% increase relative to the $24.68 million incurred in 2021, while finance cost closed at $6.60 million (2021: $8.26 million). Finance income ended the nine-month period at $289,691 (2021: $815,089). SOS reported Loss on Foreign exchange of $374,130 compared to $3.81 million booked for the corresponding period last year. Profit on disposal of PPE of $30 million was reported for the period.

As such, Profit before taxes rose 234% amounting to $260.88 million relative to the $78.15 million earned in 2021. For the quarter, there was a 342% improvement to $87.21 million (2021: $19.72 million).

Tax expense recorded for the period was $8.34 million, as such, net profit for the period totalled $252.54 million, a 223% uptick relative to the $78.15 million reported in 2021. Net profit for the quarter amounted to $78.87 million, relative to the $19.72 million earned in the previous corresponding quarter.

Total comprehensive income for the period ended at $252.54 million relative to the $78.15 million booked the prior year. Total comprehensive income for the quarter totalled $78.87 million compared to the $19.72 million in 2021.

Earnings per share for the period amounted to $1.01 (2021: $0.31), while EPS for the quarter totalled $0.32 (2021: $0.08). The twelve-month trailing EPS amounted to $1.13. As at November 04, 2022, the stock traded at $16.50 with a corresponding P/E ratio of 14.66 times.

Balance Sheet Highlights:

Total Assets increased by 22% to close at $1.12 billion as at September 30, 2022 relative to $918.76 million reported twelve months earlier. The increase in total assets was primarily driven by increases in ‘Trade and other receivables’ with an 67% increase to $193.69 million (2021: $116.08 million). ‘Inventories’ also contributed to the increase with a 27% to $356.06 million (2021: $280.49 million). The overall movement was tempered by an 11% decline in “Intangible asset” to $9.97 million (2021: $11.26 million).

Equity attributable to stockholders of the Company as at September 30, 2022 stood at $884.35 million (2021: $687.88 million). This translated in a book value per share of $3.54 (2021: $2.75).

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