FOSRICH’s net profit soars to $60.65 million for the first six months

Date: August 9, 2018

Fosrich Company Limited (FOSRICH), for the six months ended June 30, 2018, reported turnover which grew 5 % year on year, to close the period at $592.29 million compared to the $564.49 million for the same period last year. For the second quarter the company posted an increase of 19% in revenues to close at $320.43 million relative to $269.98 million for the same quarter of 2017.

Cost of goods sold showed a 4% increase closing the period at $322.97 million relative to $310.50 million for the same period last year. For the second quarter, the company had a 16% decrease in cost of goods sold to close at $179.04 million compared to $154.99 million for same quarter of 2017.

As such, gross profits for the period advanced by 6% and closed out the period at $269.32 million relative to $253.98 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 $198.15 million, a 7% decrease on the $212.14 million posted last year. According to the company the decrease was “driven primarily by efficiencies gained from the management of staff and related costs, reductions in selling and marketing expenses, reduced insurance costs and reductions in damaged goods write-off and warranty expenses. There were increases in staff training, legal and professional fees, rent and bank charges.”

This translated in a significant increase in the company’s operating profit of $60.65 million when compared to $24.87 million in 2017.

In addition, other income for the period increased soared to $17.97 million at the end of the six months ended June 30, 2018 compared to $2.66 million and was due to “favourable foreign exchange gains amounting to $15.3 million.”

Profit before finance costs, income and taxation advanced to total $78.62 million relative to $27.54 million in 2017.

Finance costs amounted to $28.49 million (2017: $19.63 million) resulting in profit before taxation was $60.65 million compared to $24.87 million in last year. The company highlighted, “This increase is being driven by a new working capital line of credit obtained to assist with the financing of operations. This new facility was obtained at more favourable rates than the previous bank facilities.”

Net Profit being total comprehensive income for the period amounted to $60.65 million(2017: $18.16) million while, for the second quarter net profit being total comprehensive income was $29.85 million (2017: $2.99 million).

As a result, earning per share for the period amounted to $0.12 compared to $0.04 in 2017. EPS for the quarter amounted to $0.06 (2017:$0.01) while the twelve month trailing EPS 0.16. The number of shares used in our calculations amounted to 502,275,555.00 units. FOSICH last traded on August 9, 2018 at $2.81.

FOSRICH noted, “The result for this, our second quarter since our listing on the Junior Market of the Jamaica Stock Exchange on 19 December 2017, reflects the implementation of specific strategies as outlined within our strategic plan. We are cognizant that despite the challenges ahead within this operating space, that we have the right talents and leadership to deliver on our plans for the ensuing period. We will continue to execute on our plans to ensure that we remain competitive and deliver value solutions to our customers.”

Balance Sheet Highlights:

As at June 30, 2018, total assets amounted to $1.50 billion.

Shareholder’s Equity for the period totaled at $669.61 million resulting in a book value per share of $1.33.

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