STO Fuels Growth: Revenue Jumps 8%, Net Profit Rises 14% in Strong Third Quarter

State Trading Organization (STO) has reported an exceptionally strong performance in the third quarter of the year, with total revenue climbing 8% to $3.84 billion and net profit after tax increasing by 14% to $186 million over the previous quarter. The impressive financial results, driven primarily by a surge in fuel sales, also reveal a significant improvement in the company's debt situation and operational efficiency.

The bedrock of STO's growth was its fuel business, which was credited for the majority of the total revenue increase. According to the company’s report, enhanced fuel sales volume was the main driver, contributing to approximately 80% of the overall revenue growth. Revenue from STO’s non-fuel business segments, including strengthened operations in pharmaceuticals and construction materials, also contributed to the positive momentum with an 8% increase.

 Financial Highlights and Operational Strength

The robust revenue translated into healthy profitability across the board:

• Gross Profit grew by 5% to $604 million.
• Operating Profit saw a substantial 23% jump to $290 million, a result of increased gross profit coupled with effective cost-cutting and careful expense management that reduced total operational expenses from $367 million to $358 million.

The company's improved financial health extends beyond the income statement. A key strategic move during the quarter was relinquishing the stalled STO Hotel project in Hulhumalé to HDC in exchange for $20 million worth of land. This action, combined with other measures, resulted in a notable deleveraging, with the crucial debt-to-equity ratio improving from 1.59 to 1.47.

Improved Capital and Shareholder Returns

STO's efforts to enhance working capital and receivables management are also yielding positive results. Improved collection efforts, particularly concerning the large outstanding amount owed by Fenaka Corporation, are evident in the working capital of $1.5 billion and a healthy current ratio of 1.22. The increase in these metrics signals strengthened operational systems and overall business stability.

Shareholders are set to benefit directly from the strong performance, with the Dividend Per Share increasing to $165, up from $145 in the second quarter.

The third quarter report paints a clear picture of a company not only achieving significant top and bottom-line growth but also executing key strategic actions to strengthen its balance sheet and operational efficiency for the long term.