SOS sales retreat from half-year record
Published:Friday | August 30, 2024 | 12:09 AM
Office furniture supplier Stationery & Office Supplies Limited, SOS, has attributed a slump in the company’s sales to shipping challenges.
“Performance for the second quarter 2024 was not as good as our comparative historic quarter for the previous year,” the company said as it released its quarterly financial report on the market.
“The decline in revenues can be credited to a rise in the price of goods, as shipping challenges caused a substantial increase in the cost of shipping,” SOS said.
Shipping rates increased by up to 200 per cent over last year due to the high demand for products and the lack of available containers out of the Far East, the company reported. Additionally, earlier in the year the Panama Canal, a key conduit for regional trade, was affected by drought conditions which reduced ship movements by one-third.
“The increase in prices caused some projects to be put on hold, as potential customers decided to wait and see if prices would once again fall,” SOS added.
New warehouse
The company, which is in the business of supplying office furniture and book manufacturing under the SEEK brand, is in the process of adding 9,000 square feet of warehouse at its 26 Collins Green Avenue location in Kingston.
“The new warehouse will aid in the additional space needed to continue to increase SOS’s inventory as well as to house the new SEEK machinery that is due to arrive into the island during the third quarter of 2024,” said the company.
SOS reported a 17 per cent decline in revenue in the April-June period, to $433 million, while its earning dropped from $121m to $47m.
Over six months to June, sales were down eight per cent from a record of $1 billion to $957m, while profit at half-year was down by one-third, from $229m to $156m.
“SOS has fallen behind in terms of revenue, compared to the corresponding period in 2023. The main reason for this is the decrease in projects tendered throughout the year,” the company said.
In 2023, for the first six months of the year, goods ordered in bulk for specific jobs accounted for almost 15 per cent of total revenue, but only eight per cent in the current period.
“This can be attributed to not only the additional cost associated with shipping, but also to the new, longer transit times on containers arriving into Jamaica, which have increased from 30 days to almost 50 days,” SOS said.
Despite the slump in its operational performance, SOS’s asset base grew 15 per cent to $1.9 billion, due to the purchase of two additional properties, “which created a 32 per cent increase in property, plant and equipment,” the company said.
Half-year sales at SOS
2024: $957m
2023: $1.05b
2022: $848m
2021: $550m
2020: $472m
2019: $638m