November 02, 2021

Turnover grew 21% year on year, to close the period at $1.69 billion compared to the $1.39 billion for the same period last year. For the third quarter, the company posted an increase of 12% in revenues to close at $592.86 million relative to $534.33 million for the same quarter of 2020. The Company noted, “These increases were attributed to actual growth in the volume of sales, increases in commodity prices and the greater availability of the products required by the market. While the overall increase in revenues was 21%, the product lines that had significant increases were solar which saw increases of 116%, hardware 79%, control devices 66% and PVC 50.”

Cost of goods sold showed a 21% increase, closing the period at $1.01 billion relative to $837.16 million for the same period last year. For the quarter, the company experienced a 12% increase in cost of goods sold to close at $356.99 million compared to $318.62 for same quarter of 2020.

As such, gross profits for the period advanced by 21% and closed out the nine month period at $671.07 million relative to $554.33 million in the prior year’s corresponding period.

In addition, other income year to date increased to $65.81 million at the end of the nine months ended September 30, 2021 compared to $32.83 million booked for the similar period in 2020.

Administrative and other expenses were $478.63 million, a 10% increase on the $436.08 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 staff training cost with the launch of the new FosRich Corporate University, increased marketing expenses, motor vehicle expenses, increased occupancy cost due to the commencement of obligations in January for the second Hayes factory building and increased depreciation and amortisation charges. There were reductions in legal fees.”

Fosrich incurred finance costs of $79.04 million, 4% more than the $75.83 million reported for the same period in 2020. Fosrich noted that this was, “due to an increase in our loan facilities.”

Notably, Fosrich reported a 138% increase in profit before taxation to $179.21 million relative to $75.25 million recorded in 2020. Profit before taxation for the quarter amounted to $64.69 million, up 22% from the prior year’s corresponding quarter of $53.06 million.

Fosrich recorded no taxation for the nine months. As such, net profit for the nine months ended September 2021 was $179.21 million versus $75.25 million documented a year earlier. Net profit for the quarter amounted to $64.69 million relative to $52.98 million reported for the third quarter of 2020.

As a result, earnings per share for the period amounted to $0.36 compared to $0.15 in 2020.  EPS for the quarter amounted to $0.13 (2020: $0.11) while the twelve month trailing EPS $0.46. The number of shares used in our calculations amounted to 502,275,555 units. FOSRICH last traded on November 2, 2021 at $8.42 with a corresponding P/E of $18.41 times.

FOSRICH noted, “Our new associated company, Blue Emerald Limited, has applied for registration of the Hayes, Clarendon facility as a special economic zone. This application has still not received approval, due primarily to problems associated with the leased property. Our attorneys are working with the attorneys of the lessor and the SEZA to address this issue. In the interim, Blue Emerald Limited has not yet commenced operations.”

Balance Sheet Highlights:

As at September 30, 2021, total assets amounted to $3.44 billion compared to $2.83 billion twelve months earlier. The growth year over year was due to increases in ‘Inventories and goods in transit’ to $1.44 billion (2020: $1.08 billion). ‘Right of Use Assets’ also contributed to the increase with $575.84 million reported relative to the $402.19 million booked the prior year.

Shareholder’s Equity for the period totaled at $1.05 billion (2020: $868.94 million) resulting in a book value per share of $2.09 (2020: $1.73).

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