Made one-off gain of J$762 million from the sale of a property

By Durrant Pate

Manufacturing conglomerate, Seprod Group is reporting a bumper September quarter, where operating profit went up by 159 per cent to close at J$1.69 billion relative to the J$650.89 million booked for the same period last year.

The increase was due largely to a one-off gain of $762 million from the sale of a property that the group was disposing of. The management also credits the positive performance for the quarter to “the deliberate efforts made in prior years to strengthen the business fundamentals”.

For the nine months ended September 30, 2020, Revenues went up to $28.66 billion compared to the $24.80 billion recorded for the same period last year. This reflects an upward movement of 16 per cent year over year.

Revenue for the quarter totalled $10.05 billion, a 23 per cent increase relative to $8.19 billion the prior year. Cost of Sales rose by 15 per cent from $15.77 billion to $18.06 billion. Consequently, Gross Profit increased 17 per cent to close at $ $10.60 billion (2019: $9.02 billion).

Big movement in income streams

Finance and Other Income for the period totalled $997.70 million relative to $175.03 million in 2019, a 470 per cent increase year over year. Other operating expenses increased by 11 per cent to close the nine months at $7.78 billion (2019: $6.99 billion). Operating Profit increased by 73 per cent to total $3.81 billion (2019: $2.21 billion) for the nine months.

Finance Costs totalled $866.09 million; a negligible decrease of 0.1 per cent compared to $866.67 million in 2019. Pre-tax Profits more than doubled to end at $2.93 billion in comparison to profits of $1.39 billion last year, representing a 111 per cent increase.

Taxation of $401.17 million was booked for the period relative to $233.81 million in 2019 to result in a Net Profit from continuing operations of $2.53 billion (2019: $1.16 billion). Seprod reported loss from discontinued operation of $47.30 million relative to last year’s loss from discontinued operations of $786.50 million.

Jump in net profits

As such, Net Profit for the nine months ended September 2020 totalled $2.48 billion (2019: $377.75 million), while for the quarter Net Profit amounted to $1.28 billion relative to the net loss of $175.37 million for the comparable quarter of 2019. Additionally, Seprod, for the nine months ended September 30, 2020, reported Total Comprehensive Income of $2.61 billion relative to $469.98 million reported in the corresponding 2019 period.

Earnings Per Share (EPS) for the nine months ended September 30, 2020 amounted to $3.38 relative to $0.51 for the corresponding period in 2019. The EPS for the quarter was reported at $1.75 relative to EPS of $0.24 reported in 2019.

According to Seprod, “the pandemic has had a negative impact on our operations, but the Group’s diversified portfolio has certainly allowed it to be resilient up to this point”.

Additionally, “we see risk in the global supply chain that could impact raw material availability and prices, disposable income pressure on our consumers and availability of workers as the community spread of the corona virus intensifies.

Nonetheless, Seprod is projecting solid fourth quarter results to close out a strong 2020 performance.

Balance Sheet at a Glance:

As at September 30, 2020, the company’s total assets increased by 11 per cent to $38.06 billion from $34.24 billion a year earlier. The main contributors to the upward movement were ‘Cash and Bank Balances’ and ‘Right of Use Asset’ which closed the period at $3.12 billion (2019: $1.55 billion) and $661.63 million (2019: nil), respectively.

Shareholder equity for the period was $16.54 billion relative to $14.82 billion last year. Book value per share is now $22.55 relative to $20.21 last year.