August 15, 2023

Future Energy Source Company Limited (FESCO) for the first quarter ended June 30, 2023 reported a 2% increase in revenue totalling $6.56 billion compared to $6.46 billion in the corresponding first quarter last year.

Cost Of Goods Sold amounted to $6.22 billion (2022: $6.24 billion), this represents a decrease of 0.3% year over year. Consequently, gross profit increased by 57% to $338.63 million compared to $216.08 million for the first quarter ended June 30, 2022.

Operating and Administrative expenses increased by 110% to close at $136.57 million (2022: $65.05 million). FESCO noted, “This expansion of expenses directly reflects the expanded operations of the Company and remains relative to its earnings as measured by gross profits.”

Operating Profit for the first quarter amounted to $202.06 million, a 34% increase relative to $151.03 million reported in 2022. Finance Cost totalled $44.05 million an increase from the income reported in the corresponding period last year 2022: $759,567.

Profit Before Taxation for the first quarter ended June 30, 2023, amounted to $158.01 million, a 4% increase relative to $151.79 million reported in 2022.

No Taxation was recorded. Net profit for the first quarter amounted to $158.01 million, a 4% increase from the $151.79 million reported in 2022.

Consequently, Earnings Per Share for the first quarter amounted to $0.063 (2022: EPS: $0.061). The twelve-month trailing EPS was $0.23, and the number of shares used in these calculations was 2,500,000,000. Notably, FESCO’s stock price closed the trading period on August 14, 2023, at a price of $3.78 with a corresponding P/E ratio of 16.36x.

FESCO noted, “ The Company’s LPG operation is capital intensive as it relates to its fixed asset requirements to establish and fulfill the business’ services and operation. Accordingly, depreciation and interest expense will in the forming period outweigh their medium and long-term “weight” relative to gross profit. Staff costs, bank charges, advertising, insurance, and security continue to be our main expense items.”

Balance Sheet Highlights

FESCO, as at June 30, 2023, recorded ‘Total Assets’ of $4.29 billion (2022: $3.13 billion), a 37% increase year over year. The increase was attributed mainly to a 94% and 220% increase in ‘Property, Plant and Equipment’ and ‘Receivables’ which closed at $2.89 billion (2022: $1.49 billion) and $898.88 million (2022: $468.24 million), respectively.

Shareholder’s equity was $1.46 billion (2022: $922.38 million), representing a book value per share of $0.58 (2022: $0.37).

FESCO noted: “In July 2023 we opened our nineteenth (19th) retail service station FESCO Maypen (DODO).”

“In August we intend to open our twentieth service (20th) service station FESCO Kitson Town (DOCO) and in October we intend to open our twenty-first (21st) service station FESCO Port Maria (DODO). We hope that all our stations will continue to provide you our valued stakeholders with great fuelling opportunities and services.”

“Finally, the Company will continue to make investments in real assets and equipment to support expanding its service station businesses, its industrial client business, and LPG business”

Disclaimer 

Analyst Certification –The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure –The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.