FOSRICH reports 2% increase in six months net profit

Date: August 9, 2019

Fosrich Company Limited (FOSRICH) for the six months ended June 30, 2019, Turnover grew 26% year on year, to close the period at $746.43 million compared to the $592.29 million for the same period last year. For the second quarter, the company posted an increase of 15% in revenues to close at $367.85 million relative to $320.43 million for the same quarter of 2018.

Cost of goods sold showed a 34% increase closing the period at $431.22 million relative to $322.97 million for the same period last year. For the second quarter, the company had an 18% increase in cost of goods sold to close at $211.72 million compared to $179.04 million for same quarter of 2018.

As such, gross profits for the period advanced by 17% and closed out the period at $315.21 million relative to $269.32 million in the prior month. Fosrich noted that, “These increases were attributed primarily to the greater availability of the products required by the market.”

Administrative and other expenses were $233.21 million, a 36% increase on the $198.15 million posted last year. According to the company the decrease was “This was driven by a combination of building out of our Human resources expertise as we build capacity for the future, as well as cost associated with the 25th anniversary celebration of the company. The addition of a Business and Relationship Manager, new General Manager, increased sales commission due to improved sales performance and improvements in staff benefits; increased legal and professional fees; increased selling and marketing costs; increased insurance costs and increased irrecoverable GCT.”

In addition, other income for the period increased to $24.41 million at the end of the six months ended June 30, 2019 compared to $17.97 million. The company noted, “other income for the year-to-date benefitted from commissions earned on JPS streetlighting and other projects, amounting to $12.5 million.”

Finance costs amounted to $43.81 million (2018: $28.49 million) resulting in profit before taxation was $62.60 million compared to $60.65 million in last year. The company highlighted, “This increase is being driven by a new bond issue, obtained to assist with the financing of operations. This new facility was obtained at more favourable rates than the previous bank or line of credit facilities.”

Following taxation of $930,365 (2018: nil), Net Profit being total comprehensive income for the period amounted to $61.67 million (2018: $60.65) million while, for the second quarter net profit being total comprehensive income was $28.78 million (2018: $29.85 million).

As a result, earning per share for the period amounted to $0.12 compared to $0.12 in 2018.  EPS for the quarter amounted to $0.06 (2018: $0.06) while the twelve month trailing EPS 0.18. The number of shares used in our calculations amounted to 502,275,555.00 units. FOSICH last traded on August 8, 2019 at $4.94.

Balance Sheet Highlights:

As at June 30, 2019, total assets amounted to $2.08 billion, a 39% increase on the $1.50 billion booked in 2018. This increase was primarily attributable to a 36% increase in ‘Inventories’ to $1.10 billion (2018: $808.38 million). The company also booked ‘Due to related parties’ of $246.82 million relative to nil the prior year.

Shareholder’s Equity for the period totalled at $755.02 million (2018: $669.61) resulting in a book value per share of $1.50 (2018: $1.33).

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