August 2, 2023

Regency Petroleum Limited (RPL) for the six-month ended June 30, 2023 reported a 9% increase in revenue, moving from $332.04 million in 2022 to $363.27 million for the period under review. For the second quarter revenue moved from $179.89 million in 2022 to $179.79 million for the period under review. RPL noted “ The company benefited from higher fuel prices in 2022 which have moderated in 2023 as global commodity prices cooled following the initial shocks. In other words, the decrease in fuel prices have resulted in decreased revenues even though our sales volumes have increased.”

The cost of sales for the year ended June 30, 2023 increased 13% from $269.72 million in 2022 to $303.62 million in 2023. As a result, gross profit decreased to $59.66 million (2022: $62.33 million). For the quarter gross profit amounted to $27.15 million (2022: $34 million).

Administrative expenses for the period jumped 112% to $24.01 million compared to $11.32 million in 2022. This resulted in an operating profit of $24.29 million for the period ended compared to an operating profit of $11.33 million documented for the comparable period in 2022. For the quarter operating profit amounted to $14.93 million (2022: $28.58 million).

Consequently, RPL recorded profit before tax of $25.01 million, a 51% decrease from $51.07 million booked for the same period last year. For the quarter profit before tax amounted to $5.27 million (2022: $27.63 million).

The Company incurred no taxation for the period under review relative to $12.21 million for the comparable period, resulting in a net profit of $25.01 million versus the $38.86 million booked twelve months earlier. Net profit for the quarter amounted to $5.27 million (2022: $15.42 million).

As a result, earnings per share (EPS) for the six months ended amounted to $0.017 compared to earnings per share (EPS) of $0.034 reported in 2022. For the quarter EPS amounted to $0.004 (2022: $0.013). The trailing twelve months EPS amounted to $0.029. The number of shares used in our calculations is 1,435,786,770 units. RPL stock last traded on July 31, 2023, at $2.66 with a corresponding P/E ratio of 89.91 times.

Balance Sheet at a glance:

RPL, as at June 30, 2023, recorded ‘Total Assets’ of $537.27 million (2022: $204.83 million), a 162% increase year over year. The increase was attributed mainly to increases of $213.20 million and $84.46 million increase in “Property, Plant and equipment” and “Receivables” which closed at $348.05 million (2022: $134.86 million) and $130.57 million (2022: $47.12 million), respectively.

Shareholders’ equity totaled $413.84 million (2022: $111.21 million), resulting in a book value per share of $0.29 (2022: $0.08).

RPL also noted “The service stations in Paradise Pen and Negril, Westmoreland faced delays in their opening due to issues with the delivery of final components and the unfortunate passing of the main contractor for one of the projects. However, a new contractor has been found for one of the stations, and the opening ceremony for the Paradise Pen station is scheduled for August 16, 2023. The team is working diligently to complete the Negril service station within the next eight weeks. These delays are being addressed with strict adherence to the new timelines, as the company is committed to delivering these projects on time to fulfill its promises to shareholders, customers, and other stakeholders. These new service stations are expected to add significant value to the market.”

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