November 11, 2021

Future Energy Source Company Limited (FESCO) reported $4.33 billion in turnover relative to the $2.81 billion reported in 2020, representing a 54% increase. For the second quarter FESCO recorded a 51% increase in revenue to $2.42 billion from $1.60 billion reported for the corresponding period in 2020. The Company noted, ” Several factors affect revenue/turnover with the supply price of fuel being a major component. FESCO has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profits.”

Cost of sales amounted to $4.20 billion (2020: $2.72 billion) a 54% increase from the year prior; resulting in gross profits of $128.33 million (2020: $93.74 million). While cost of sales for the second quarter ended September 30, 2021 rose by 52% to close at $2.35 billion (2020: $1.54 billion), leading to a gross profit of $73.47 million (2020: $60.16 million), up 22% year over year.

Operating and administrative expenses amounted to $38.29 million (2020: $29.55 million). For the second quarter FESCO reported operating and administrative expenses of $17.77 million, a 15% decrease relative to the $20.93 million reported in 2020.

For the six month period FESCO saw a 40% increase in operating profit, this amounted to $90.04 million (2020: 64.19 million). The Company reported operating profit of $55.70 million for the second quarter ended September 30, 2021, compared to $39.24 million documented for the comparable period in 2020.

For the six months ending September 30, 2021, FESCO recorded $7.11 million in finance income (2020: $782,949). Finance income for the three months closed at $1.52 million versus the $48,283 booked for the previous corresponding quarter.

FESCO recorded profit before tax of $97.15 million (2020: $64.97 million). For the quarter FESCO recorded profit before tax of $57.21 million relative to pre-tax profit of $39.28 million for the same period last first quarter.

FESCO incurred no tax for the period (2020: $15.03 million) resulting in net profit of $97.15 million versus the $49.94 million booked twelve months earlier. For the quarter ended September 30, 2021, net profit amounted to $57.21 million versus the $25.86 million booked twelve months earlier.

The earnings per share (EPS) for the six months ended September 30, 2021, amounted to $0.039 relative to the EPS of $0.020 reported in 2020. EPS for the second quarter ended September 30, 2021, amounted to $0.023 compared to the EPS of $0.010 reported in 2020. The number of shares used in our calculations is 2,500,000,000 units. The twelve months trailing EPS was $0.062. FESCO stock last traded on November 10, 2021, at $2.80 with a corresponding P/E ratio of 45.05 times.

Balance Sheet at a glance:

FESCO, as at September 30, 2021, recorded ‘Total Assets’ of $1.27 billion (2020: $531.47 million), a 140% increase year over year. The increase was attributed mainly to a 257% increase in receivables which ended at $448.37 million (2020: $125.65 million). Additionally, there was a 211% increase in ‘Cash and cash equivalents’, which totalled $307.46 million (2020: $98.83) and a 94% increase in ‘Property, Plant and Equipment’ which amounted to $390.71 million (2020: $201.66 million).

Shareholders’ equity amounted to $639.10 million for the period under review, a 150% increase when compared to the $255.40 million reported in 2020. This resulted in a book value per share of $0.26 (2020: $0.10).

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