May 2, 2023
FosRich Company Limited (FOSRICH) for the three months ended March 31, 2023 booked a 20% increase in revenue to total $1.08 billion compared to $900.29 million for the same quarter in 2022. The Company noted that, “These increases were attributed primarily to increased sales in six (6) of our eleven (11) Product Groups as follows: Transformer, Solar, LED, Hardware, Wires and Wiring Devices.”
Cost of sales for the year increased 24%, moving from $512.70 million in March 2022 to $637.80 million for the period under review. As such, gross profit amounted to $446.01 million, an increase of 15% when compared to $387.59 million recorded for the quarter ended March 31, 2022.
Other income, for the quarter, totalled $638,535 a decline of 83% year over year, when compared to the $3.70 million recorded for the previous year’s comparable quarter.
Administrative and other expenses rose by 33%, to total $260.22 million (2022: $195.16 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 travelling and motor vehicle expenses and increased insurance costs due to increases in policy renewal rates.” as per Management.
Finance costs of $47.44 million were recorded for the period, a 27% increase when compared to $37.24 million for the corresponding period in 2022. FosRich noted, “This increase is being driven primarily by increases in Bond renewal rates and increases in bank financing.”
As a result, operating profit for the quarter fell by 13% to close at $138.98 million (2022: $158.89 million).
Taxes incurred for the quarter amounted to $17.26 million relative to nil in the prior period. Net profit for the three months ended March 31, 2023 totalled $121.72 million, a 23% decline compared to $158.89 million reported for the first three months of 2022.
Earnings per share (EPS) for the period totalled $0.0242 (2022: $0.0316). The trailing twelve months earnings per share amounted to $0.0572. The number of shares used in our calculations amounted to 5,022,755,550 units. FOSRICH last traded on May 1, 2023 at $2.70 with a corresponding P/E of 47.16x.
Balance Sheet at a Glance:
As at March 31, 2023, total assets amounted to $5.60 billion, up 31% or $1.33 billion in comparison to the $4.28 billion as at March 31, 2022. The increase in total assets was largely due to ‘Inventories and goods in transit’ which totalled $2.44 billion (2022: $1.49 billion). The company noted, “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 stockouts.”
Shareholders’ Equity of $1.91 billion was reported as at March 31, 2023 (2022: $1.67 billion) which resulted in a book value per share of $0.38 (2022: $0.33).
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