FESCO reports twelve months net profit of $268.35 million

May 12, 2022

Future Energy Source Company Limited (FESCO) for the financial year ended March 31, 2022 reported a 118% increase in revenue, moving from $5.85 billion in 2021 to $12.77 billion for the period in review. For the quarter, the Company revenues rose to $4.76 billion from the $1.51 billion booked March 31, 2021, representing an increase of 216%.

The cost of sales margin for the year ended March 31, 2022 remains unchanged at 97%, resulting in a 119% year over  increase to $12.39 billion (2021: $5.66 billion). As a result, gross profit increased to $383 million (2021: $191.59 million), a solid 100% year over growth. Within the quarter, FESCO recorded cost of sales of $4.62 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 $137 million, reflecting an increase of 176% year over year (2021: $49.66 million).

Operating and Administrative expenses amounted to $127.18 million, up from $60.24 million reported in 2021.

This resulted in an operating profit of $255.82 million for the year end compared to an operating profit of $131.35 million documented for the comparable period in 2021. For the quarter, operating profit amounted to $99.32 million relative to operating profit of $48.15 million recorded in the prior corresponding quarter.

Finance income rose by 33% to close at $12.53 million versus the $9.43 million booked twelve months earlier. For the quarter financial cost closed the period at $1.77 million, versus an income of $398,872 booked in March 31, 2021.

Consequently, FESCO recorded profit before tax of $268.35 million, 91% increase from $140.78 million booked for the same period last year.  Pretax profit for the quarter closed at $97.56 million compared to profit before tax of $48.55 million in the previous comparable quarter.

The Company incurred no taxes for the period under review relative to $32.62 million for the comparable period, resulting in net profit and comprehensive income of $268.35 million versus the $108.16 million booked twelve months earlier. For the quarter, the Company recorded a net profit of $97.56 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 $0.107 compared to earnings per share (EPS) of $0.043 reported in 2021. For the quarter, the earnings per share totaled $0.039 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 May 11, 2022, at $6.87 with a corresponding P/E ratio of 64.02 times.

FESCO noted, “the Company hopes to continue to benefit from increased business activity occasioned by longer opening hours. Our FESCO Beechwood service station and convenience store, which includes a Mr. Breakfast Lunch and Dinner to Go restaurant, is now open twenty four hours per day continues to gain traction and its patronage increases weekly. The ATM will be opened in the coming weeks and we believe that these additional services compliment and increase the value proposition of FESCO Beechwood.” Additionally, “FESCO Ferry recently opened its FYC Convenience store and Tastee restaurant and we believe customers will continue to be delighted at the service station’s offerings 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, as well as its promised entry into the LPG industry.” as per FESCO Management.

The company also highlighted the following;

    • “exceeded our twelve (12) month profit after tax forecast, per our IPO prospectus, by J$4.4 million or 2.4% despite opening both FESCO Ferry and FESCO Beechwood behind schedule, respectively;
    • declared an interim dividend of $0.01 per share totalling J$25.0 million payable on June 24, 2022;
    • raised J$1.0 billion in debt via a bond arranged by NCB Capital Markets (NCBCM) to finance its network expansion of service stations and LPG assets acquisition;
    • successfully introduced a new fuel to the Jamaican market place, E10 88 blend premium gasoline, currently available only at FESCO Beechwood.”

Balance Sheet at a glance:

FESCO, as at March 31, 2022, recorded ‘Total Assets’ of $2.78 billion (2021: $551.49 million), a 404% increase year over year. The increase was attributed mainly to a $1.06 billion, $584.69 million and $445.18 million increase in “Cash and cash equivalents’, ‘Receivables’ and ‘Property, Plant and Equipment’ which closed at $1.14 billion (2021: $72.62 million), $718.76 million (2021: $134.08 million) and $701.35 million (2021: $256.17 million), respectively.

Shareholders’ equity totaled $785.30 million (2021: $318.42 million), resulting in a book value per share of $0.31 (2021: $0.13).


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