FosRich Company Limited (FOSRICH) for the three months ended March 31, 2021 booked a 22% increase in revenue to total $549.28 million compared to $448.82 million for the same quarter in 2020. The Company noted that, “these increases were attributed primarily to increased sales in seven (7) of our eleven (11) Product Groups as follows: Electrical Lighting, Hardware, LED, Panels, PVC, Solar and Wiring Devices.”

Cost of sales for the year increased 28%, moving from $278.91 million in March 2020 to $257.59 million for the period under review. As such, gross profit amounted to $191.69 million, an increase of 28% when compared to $169.91 million recorded for the quarter ended March 31, 2020.

Other income, for the quarter totalled $15.12 million an increase of 124% year over year, when compared to the $6.75 million recorded for the previous year’s comparable quarter.

Administrative and other expenses fell by 1%, to total $143.60 million (2020: $145.65 million). “The changes was driven primarily by reductions in legal and professional fees and computer expenses. There were increased staff related costs for salary adjustments, increased sales commission due to improved sales performance and improvements in staff benefits; increased motor vehicle expenses and increased occupancy cost due to the commencement of obligations in January for the second Hayes factory building,” as per Management.

Finance costs of $24.84 million were recorded for the period, a 5% decrease when compared to $26.19 million for the corresponding period in 2020. FosRich noted, “This reduction is being driven primarily by reductions in amortizing facilities.”

As a result, operating profit for the quarter rose by 104% to close at $38.37 million (2020: $4.82 million).

No taxes were incurred for the quarter, thus net profit for the three months ended March 31, 2021 totalled $38.37 million, a 697% increase compared to $4.82 million reported for first three months of 2020.

Earnings per share (EPS) for the period totalled $0.076 (2020: $0.010). The trailing twelve months earnings per share amounted to $0.317. The number of shares used in our calculations amounted to 502,275,555 units. FOSRICH’s stock price close the trading period on April 30, 2021 at $7.17 with a corresponding P/E of 22.62x.  

Balance Sheet at a Glance: 

As at March 31, 2021, total assets amounted to $3.28 billion, up 42% or $969.59 million from the balance of $2.31 billion as at March 31, 2020. The increase in total assets was largely due to ‘Inventories’ and ‘Right of use assets’ which totalled $1.49 billion (2020: $1.20 billion) and $597.83 million (2020: nil), respectively. The company noted, “The Company continues to closely 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.”

Shareholders’ Equity of $906.66 million was reported as at March 31, 2021 (2020: $868.56 million) which resulted in a book value per share of $1.81 (2020: $1.73).

Disclaimer:

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.