March 11, 2024
Stationery and Office Supplies Limited (SOS) for the year ended December 31, 2023, reported an 11% increase in revenue totalling $1.94 billion compared to $1.75 billion in the corresponding period last year. Revenue for the fourth quarter had a 6% decrease to close at $402.84 million compared to $427.33 million for the comparable quarter of 2022. Management noted that there were only 15 working days in December 2023, which limited SOS’s monthly output. It was further noted that, “There were also several projects that could not be completed due to companies closing for the holiday season. These projects extended into the new year.”
Cost of sales amounted to $953.08 million (2022: $911.92 million), this represents an increase of 5% year over year. Consequently, gross profit increased by 17% to $982.08 million compared to $836.23 million for the year ended December 31, 2022. The company booked gross profit of $152.28 million for the fourth quarter versus $161.76 million reported for the similar quarter of 2022.
Administrative and general expenses increased by 21% to close at $483.46 million (2022: $399.14 million), while selling and promotional costs increased by 1% from $131.87 million in 2022 to $132.74 million in the period under review. Depreciation & amortisation for the year ended December 31, 2023, amounted to $36.83 million, a 22% increase relative to $30.08 million reported in 2022. Impairment loss on financial assets declined by 58% to $4.80 million (2022: $11.50 million).
Operating profit for the year ended December 31, 2023, amounted to $324.38 million, a 23% increase relative to $263.65 million reported in 2022.
Finance income surged to $4.09 million from the $337,492 reported in 2022, while finance costs totalled $6.87 million, a 21% decrease from the corresponding period last year (2022: $8.71 million).
Gain on foreign exchange for the year ended December 31, 2023, amounted to $3.54 million (2022: loss of $1.20 million). Profit on disposal of property plant and equipment for the year amounted to $7.11 million, a 76% decrease from the $30.00 million reported in 2022. Loss on investment increased year over year to $524,825 (2022: $232,598).
Profit before tax for the year ended December 31, 2023, amounted to $331.72 million, a 17% increase relative to $283.84 million reported in 2022. Loss before tax for the fourth quarter amounted to $5.61 million (2022: pre-tax profit of $22.97 million).
Income tax expenses increased by 97% to $53.79 million (2022: $27.34 million). Income tax expenses for the quarter totalled $10.79 million relative to the $19.00 million booked in the prior year’s quarter.
Net profit for the year totalled $277.94 million, relative to the $256.51 million reported twelve months prior. For the quarter, net loss amounted to $16.40 million compared to the $3.97 million reported in 2022.
Earnings per share (EPS) for the year amounted to $0.12 (2022: $0.11), while loss per share for the quarter totalled $0.007 (2022: EPS of $0.002). The number of shares used in these calculations was 2,251,084,500.
Notably, SOS’s stock price closed the trading period on March 8, 2024, at a price of $1.70 with a corresponding P/E ratio of 13.77x.
Management noted that, “Even though the 4th quarter was not as profitable as we had hoped for, there were still many positive steps taken during this time. These include:
1 – The 5th & 6th containers of the year were exported to “The Office Authority” in Trinidad.
2 – Confirmation of a new regional dealer “Décor Office” in St. Lucia that will contribute to our continued regional expansion plans.
3 – An order was placed to purchase new machinery for Seek to help boost production. This new
machinery is expected to arrive mid-2024 and is expected to double Seek’s output.
4 – The acquisition of 2 additional properties to aid in the further expansion of SOS going into 2024 and beyond.
5 – The completion of the 3,000 square foot warehouse expansion at our Montego Bay office.”
Balance Sheet Highlights:
The company’s assets totalled $1.73 billion (2022: $1.39 billion); a 21% increase year over year largely attributed to increases in property, plant and equipment (up 35% or $227.34 million), right-of-use assets (up 36% or $222.11 million) and cash and cash equivalents (up 104% or $136.71 million).
Shareholder’s equity was $1.33 billion (2022: $1.10 billion), representing a book value per share of $0.59 (2022: $0.49).
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