Durrant Pate/Contributor

Petroleum retail company Future Energy Source Company Limited (FESCO) recorded a 238 per cent increase in revenue to J$6.46 billion in the June first quarter, up from J$1.91 billion for the corresponding period in 2021. 

Several factors accounted for the increased revenues with the supply price of fuel being a major component. On average, refinery prices during the quarter increased 41.67 per cent to 57.10 per cent or from J$60.38 to J$77.10 per litre relative to the first quarter of 2021.

‘Cost of sales’ for the period also rose by 236 per cent to close at J$6.24 billion (2021: J$1.85 billion), leading to a gross profit of J$216.08 million (2021: J$54.86 million), up 294 per cent year-over-year.

Operating and administrative expenses amounted to J$65.05 million, a 217 per cent increase relative to $20.52 million reported in 2021. With the uptick, FESCO reported operating profit of J$151.03 million for the first quarter compared to J$34.34 million documented in 2021.

Big decline in finance income

Finance income for the three months ended June 30, 2022, declined by 86 per cent to close at J$759,567 versus the J$5.60 million booked for the previous corresponding quarter. Consequently, FESCO recorded profit before tax of J$151.79 million relative to a pre-tax profit of J$39.94 million for the same period last year.

FESCO incurred no tax for the quarter ended June 2022 (2021: nil), resulting in a net profit of J$151.79 million versus the J$39.94 million booked twelve months earlier. The earnings per share for the quarter amounted to J$0.061 compared to J$0.016 in 2021.

Management boasted that FESCO’s, “Current ratio stands at 1.26 (June 2022) down from 2.60 at March 31, 2022. This reduction reflects the company’s capital expenditure (CAPEX) initiative to expand its fuel distribution network and acquisition of LPG assets.”

FESCO subsequent to June 30, 2022, restructured a significant portion of its short-term debt to long-term debt, the result of which will further improve its current ratio. As at June 30, 2022, the company’s debt to equity (D/E) (long-term-static) is 0.99 versus 1.31 from March 2022.

FESCO, as at June 30, 2022, recorded ‘Total Assets’ of J$3.13 billion (2021: J$918.31 million), a 240 per cent increase year over year. The increase was attributed mainly to a 303 per cent and 220 per cent increase in ‘Property, Plant and Equipment’ and ‘Cash and cash equivalents’ which closed at J$1.49 billion (2021: J$369.96 million) and J$903.25 million (2021: J$282.15 million), respectively.

Shareholders’ equity totalled J$922.38 million (2021: J$581.69 million), resulting in a book value per share of J$0.37 (2021: J$0.23).