November 10, 2023

Stationery and Office Supplies Limited (SOS) for the nine months ended September 30, 2023, reported a 16% increase in revenue totalling $1.53 billion compared to $1.32 billion in the corresponding period last year. Revenue for the third quarter had a 3% increase to close at $487.90 million compared to $473.11 million for the comparable quarter of 2022.

Cost of sales amounted to $702.52 million (2022: $646.35 million), this represents an increase of 9% year over year. Consequently, gross profit increased by 23% to $829.80 million compared to $674.46 million for the nine months ended September 30, 2022. The company booked gross profit of $271.88 million for the third quarter versus $242.97 million reported for the similar quarter of 2022.

Administrative and general expenses increased by 20% to close at $378.24 million (2022: $314.10 million), while selling and promotional costs increased by 1% from $96.40 million in 2022 to $97.07 million in the period under review. Depreciation, amortisation & impairment for the nine months marginally declined to $26.445 million (2022: $26.448 million).

Operating profit for the nine months ended September 30, 2023, amounted to $327.90 million, a 38% increase relative to $237.56 million reported in 2022. Operating profit for the third quarter amounted to $96.37 million (2022: $86.23 million).

Finance income increased by 774% to reach $2.53 million (2022: $289,691), while finance costs declined by 20% to total $5.29 million (2022: $6.60 million).

Gain on foreign exchange for the nine months ended September 30, 2023 amounted to $5.08 million (2022: loss of $374,130). Profit on disposal of property, plant and equipment for the nine months amounted to $7.11 million, a 76% decrease from the $30.00 million reported in 2022. For the third quarter, Profit on disposal of property, plant and equipment was $7.11 million (2022: $3.04 million).

Profit before tax for the nine months ended September 30, 2023, amounted to $337.34 million, a 29% increase relative to $260.88 million reported in 2022. Profit before tax for the third quarter amounted to $107.99 million (2022: $87.21 million).

Income tax expenses increased by 416% to $43.00 million (2022: $8.34 million). Income tax expenses for the quarter totalled $12.75 million relative to the $8.34 million booked in the prior year’s quarter.

Net profit for the period increased by 17% to total $294.34 million, relative to the $252.54 million reported twelve months prior. For the quarter, net profit amounted to $95.24 million compared to the $78.87 million reported in 2022.

Earnings per share for the nine months amounted to $0.13 (2022: $0.11), while EPS for the quarter remained at $0.04. The twelve-month trailing EPS was $0.13, and the number of shares used in these calculations was 2,251,084,500.

Notably, SOS’s stock price closed the trading period on November 9, 2023, at a price of $1.66 with a corresponding P/E ratio of 12.53x.

Balance Sheet Highlights:

The company’s assets totalled $1.73 billion; a 54% increase relative to $1.12 billion booked in 2022. This upward movement was largely due to property, plant and equipment, which amounted to $669.23 million (2022: $395.83 million), followed by an increase of 223% in bank and cash, which amounted to $320.84 million (2022: $99.33 million).

Shareholder’s equity was $1.35 billion (2022: $884.35 million), representing a book value per share of $0.60 (2022: $0.39).

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