June 29, 2022

Future Energy Source Company Limited (FESCO) for the financial year ended March 31, 2022 reported a 116% increase in revenue, moving from $5.86 billion in 2021 to $12.67 billion for the period in review. For the quarter, the Company revenues rose to $4.66 billion from the $1.51 billion booked March 31, 2021, representing an increase of 210%.

The cost of sales margin for the year ended March 31, 2022 remains unchanged at 97%, resulting in a 116% year-over-year increase to $12.28 billion (2021: $5.66 billion). As a result, gross profit increased to $391.22 million (2021: $194.82 million). Within the quarter, FESCO recorded cost of sales of $4.52 billion, which tripled relative to the $1.46 billion booked in the same quarter last year. As such, the fourth quarter’s gross profit totaled $145.22 million, reflecting an increase of 192% year over year (2021: $49.66 million).

Operating and Administrative expenses amounted to $133.94 million, up from $59.37 million reported in 2021.

This resulted in an operating profit of $254.95 million for the year end compared to an operating profit of $134.69 million documented for the comparable period in 2021. For the quarter, operating profit amounted to $98.45 million relative to operating profit of $48.15 million recorded in the prior corresponding quarter.

Finance income fell by 52% to close at $2.94 million versus the $6.09 million booked twelve months earlier. For the quarter financial cost closed the period at $11.36 million, versus an income of $398,872 booked in March 31, 2021.

Consequently, FESCO recorded profit before tax of $257.88 million, an 83% increase from $140.78 million booked for the same period last year.  Pretax profit for the quarter closed at $87.09 million compared to profit before tax of $48.55 million in the previous comparable quarter.

The Company incurred taxation of $4.24 million for the period under review relative to $32.62 million for the comparable period, resulting in net profit and comprehensive income of $253.64 million versus the $108.16 million booked twelve months earlier. For the quarter, the Company recorded a net profit of $82.85 million compared to a profit of $38.14 million for the corresponding quarter in 2021.

As a result, earnings per share (EPS) for the year end amounted to $0.101 compared to earnings per share (EPS) of $0.043 reported in 2021. For the quarter, the earnings per share totaled $0.033 relative to EPS of $0.015 in 2021. The number of shares used in our calculations is 2,500,000,000 units. FESCO stock last traded on June 28, 2022, at $5.99 with a corresponding P/E ratio of 59.04 times.

FESCO noted, “Management is proud to report that despite the onset of COVID 19 pandemic and all the attendant restrictions on travel, social engagements and general business activity which presented a very challenging year for Jamaica and our industry, in particular, the Company has exceeded its performance for the year ended 31 March 2022.”

Balance Sheet at a glance:

FESCO, as at March 31, 2022, recorded ‘Total Assets’ of $2.79 billion (2021: $551.49 million), a 407% increase year over year. The increase was attributed mainly to increases of $1.06 billion and $882.28 million increase in “Cash and cash equivalents’ and ‘Property, Plant and Equipment’ which closed at $1.13 billion (2021: $72.62 million) and $1.14 billion (2021: $256.17 million), respectively.

Shareholders’ equity totaled $770.59 million (2021: $318.42 million), resulting in a book value per share of $0.31 (2021: $0.13).

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