FosRich reports 160% increase in six months net profit

August 8, 2022

FosRich Company Limited (FOSRICH) for the six months ended June 30, 2022, booked a 65% increase in revenue to total $1.80 billion compared to $1.09 billion for the same period in 2021. The Company noted, “These increases were attributed primarily to increased sales in ten (10) of our eleven (11) Product Groups, with Panels being the only product group that registered a decrease over the prior year. ” Revenue for the quarter closed at $898.80 million compared to $543.80 million for the second quarter ended June 30, 2021.

Cost of sales year to date increased 56%, moving from $657.87 million in 2021 to $1.03 billion. As such, gross profit amounted to $770.90 million, an increase of 77% when compared to $435.21 million recorded for the period ended June 30, 2021. Gross profit for the second quarter closed at $399.66 million (2021: $243.520 million).

Other income, year to date totaled $22.68 million a decrease of 43% year over year, when compared to the $39.86 million reported twelve months earlier.

Administrative and other expenses rose by 31%, to a total of $405.12 million (2021: $309.77 million). “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; increased selling and marketing 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.” the Company noted.

The Company recorded finance cost of $90.58 million for the first six months of the year, a 78% increase when compared to $50.78 million documented for the corresponding period in 2021. FosRich noted, “This increase is being driven primarily by increases in financing.”

Consequently, total expenses moved from $360.55 million in 2021 to $495.69 million to date. As a result, operating profit for the period increased by 160% to close at $297.88 million (2021: $114.52 million).

The Company reported no taxation charge to date, resulting in a net profit of $297.88 million, 160% above last year’s $114.52 million. Net profit for the quarter amounted to $138.64 million (2021: $76.16 million).

As at June 30, 2022, total assets amounted to $4.65 billion, up 44% from the balance of $3.24 billion as at June 30, 2021. The increase in total assets was largely due to ‘Property, plant and equipment’ which totaled $858.85 million (2021: $348.40 million). Inventories rose 24% year over year to $1.70 billion (2021: $1.37 billion). FosRich indicated, “The company continues to proactively manage inventory balances and the supply-chain, with a view to ensuring that inventory balances being carried are optimised, relative to the pace of sales, the time between the orders being made and when goods become available for sale, to avoid both overstocking and stock-outs. Monitoring is both at the individual product level and by product categories. Inventories have remained stable over both periods. Shipping delays continue to be an important factor in calculating optimum inventory values.”

Shareholders’ Equity of $1.82 billion was reported as at June 30, 2022 (2021: $983.27 million) which resulted in a book value per share of $0.36 (2021: $.20).