FOSRICH reports 116% increase in nine months net profit

November 2, 2022

Turnover grew 53% year on year, to close the period at $2.58 billion compared to the $1.69 billion for the same period last year. For the third quarter, the company posted an increase of 31% in revenues to close at $779.18 million relative to $592.86 million for the same quarter of 2021. The Company noted, “These increases were attributed to increased sales in eleven (11) of our twelve (12) Product Groups, with Panels being the only product group that registered a decrease over the prior year.”

Cost of goods experienced a 46% increase, closing the period at $1.48 billion relative to the $1.01 billion for the same period last year. For the quarter, the company experienced a 26% increase in cost of goods sold to close at $449.71 million compared to $356.99 million for same quarter of 2021.

As such, gross profits for the period advanced by 64% and closed out the nine month period at $1.10 billion relative to $671.07 million in the prior year’s corresponding period.

Other income year to date decreased to $26.42 million at the end of the nine months ended September 30, 2022 compared to $65.81 million booked for the similar period in 2021.

Administrative and other expenses were $612.41 million, a 37% increase on the $446.86 million posted last year. According to the Company, “The changes were driven primarily by increased staff related costs for salary adjustments, increased sales commission due to improved sales performance and improvements in staff benefits; increased occupancy cost due to the commencement of obligations for our new Fulfilment Centre at 76 Molynes Road and disposal losses related to the early termination of the old 76 Molynes Road lease; increased selling and marketing costs; increased computer expenses; increased local travel and petrol costs; increased electricity cost; increased legal and professional fees; increased depreciation due to increases in the carrying values of property plant and equipment and increased security expense.”

FosRich incurred finance costs of $126.58 million, 14% more than the $110.81 million reported for the same period in 2021. FosRich noted that this was, “This increase is being driven primarily by increases in financing.”

Notably, Fosrich reported a 116% increase in operating profit to $387.88 million relative to the $179.21 million recorded in 2021. Operating profit for the quarter amounted to $89.91 million, up 39% from the prior year’s corresponding quarter of $64.69 million.

Fosrich recorded no taxation for the nine months. As such, net profit for the nine months ended September 2022 was $387.88 million versus $179.21 million documented a year earlier. Net profit for the quarter amounted to $89.91 million relative to $64.69 million reported for the third quarter of 2021.

As a result, earnings per share for the period amounted to $0.077 compared to $0.036 in 2021.  EPS for the quarter amounted to $0.018 (2021: $0.013) while the twelve-month trailing EPS $0.081. The number of shares used in our calculations amounted to 5,022,755,550 units. FOSRICH last traded on November 1, 2022 at $4.39 with a corresponding P/E of $54.05 times.

FOSRICH noted, “We are happy to report that our associated company, Blue Emerald Limited, has now received a licence from The Special Economic Zone Authority. This will allow Blue Emerald Limited to take advantage of the significant long-term tax concessions that are available. Activities being undertaken at the new Hayes facility in Clarendon, will be done through this new entity acting exclusively for FosRich under a contract manufacturing arrangement.”


Balance Sheet Highlights:

As at September 30, 2022, total assets amounted to $4.63 billion compared to $3.44 billion twelve months earlier. The growth year over year was due to increases in ‘Property, plant and equipment’ to $844.77 million (2021: $358.10 million). ‘Inventories and goods in transit’ also contributed to the increase with $1.86 billion reported relative to the $1.44 billion booked the prior year.

Shareholder’s Equity for the period totaled at $1.91 billion (2021: $1.05 billion) resulting in a book value per share of $3.8 (2021: $2.09).


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