October 30, 2023

Fosrich Company Limited (FOSRICH) for the nine months ended September 30, 2023, reported an 11% increase in Revenue totaling $2.86 billion compared to $2.58 billion in the corresponding period last year. Revenue for the Third quarter had an 8% increase to close at $838.75 million compared to $779.18 million for the comparable quarter of 2022. “The increase in income was attributed primarily to increased sales in ten (10) of our twelve (12) Product Groups”, management noted.

Cost of Sales amounted to $1.78 billion (2022: $1.46 billion), this represents an increase of 22% year over year. Consequently, gross profit decreased by 3% to $1.08 billion compared to $1.12 billion for the nine months. The company booked gross profit of $264.07 million for the third quarter versus $329.68 million reported for the similar quarter of 2022. The company noted that the decline in gross profit was driven by a 54% reduction in Industrial products and a 21% reduction in Panels.

Other Income decreased by 36% to close at $5.62 million (2022: $8.78 million), while Administrative and other expenses increased by 28% from $612.41 million in 2022 to $781.17 million in the period under review. Administrative and other expenses rose 23% to a total of $254.43 million for the quarter.

FOSRICH highlighted, “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 travelling and motor vehicle expenses; increased insurance costs due to increases in policy renewal rates and increased depreciation due to increases in the carrying values of property plant and equipment, increased professional fees, increased rent and increased security cost.”

Finance cost totalled $151.88 million a 20% increase from the corresponding period last year. (2022: $126.58 million). Finance cost for the quarter amounted to $43.87 million compared to $36.01 million in the prior year.

Profit before taxation for the nine months amounted to $154.49 million, a 60% decrease relative to $387.88 million reported in 2022. Loss before taxation for the Third quarter amounted to $31.11 million (2022: Profit of $89.91 million).

Taxation for the nine months reached $19.03 million (2022: nil). Net profit for the nine months amounted to $135.47 million, a 65% decrease from the $387.88 million reported in 2022. For the Third quarter, Net loss was $27.03 million (2022: Net profit of $89.91 million).

Consequently, Earnings Per Share for the nine months amounted to $0.03 (2022: EPS: $0.08), while Loss Per Share for the quarter totaled $0.01 (2022: EPS: $0.02). The twelve-month trailing EPS was $0.01, and the number of shares used in these calculations was 5,078,485,197.

Notably, FOSRICH’s stock price closed the trading period on October 27, 2023, at a price of $2.50 with a corresponding P/E ratio of 173.68x.

Balance Sheet Highlights

The company’s assets totalled $5.41 billion (2022: $4.63 billion). This resulted mainly from increases in ‘Investment – Associated Company’ closing at $254.63 million compared to $2.76 million a year ago.

Shareholder’s equity was $2.04 billion (2022: $1.91 billion), representing a book value per share of $0.40 (2022: $0.38).