Revenues up 187.7% to J$6.97 billion during September second quarter

Durrant Pate/Contributor

Service station chain FESCO is reporting a bumper half year and September quarter in which profitability and revenues have grown.

In addition, the publicly listed company has expanded its operations opening up two additional service stations during the quarter at Whitehall, St Elizabeth and last Friday (November 11) opened its 18th service station, FESCO Ocho Rios. The management reports that the company continues to achieve solid financial performance whilst pursuing it capital expenditure (CAPEX) and investment programme.

Net profit for the September quarter surged by 125.98 per cent or J$72.08 million to J$129.29 million. For the half-year period net profit amounted to J$281.08 million, which exceeded the net profit for the entire financial year ended March 2022 by J$27.44 million or 10.82 per cent, closing at J$253.64 million.

This half-year performance has almost tripled its entire 12-month net profit performance of the previous financial ended March 2021 when net profit came out at J$108.160 million. For the period under review, FESCO achieved book value of equity of J$1.05 billion, which is up 36.47 per cent or J$281.06 million since the last financial year ended March 31, 2022, and up 64.55 per cent or J$412.57 million when compared to the same quarter of September 30, 2021.

CAPEX to exceed 2021 number

The company has been aggressive in its capital expenditure programme, which continues a pace with the renovation and refreshing the aesthetics of six service stations during the period in addition to the increased availability of E10 88 fuel, which is now available at FESCO Beechwood, FESCO Mandeville, FESCO Braeton FESCO Bodles (Old Harbour) and FESCO Stony Hill.

FESCO continues to generate operating cash surpluses and has utilised its cash holdings to reinvest significantly in the business to provide a platform for future growth. The company’s CAPEX for the half year is J$870.7 million, which is already running to the CAPEX for the entire year ended March 2022, which amounted to J$893.6 million.

Property, plant, and equipment (PPE) now stands at almost J$2 billion, which reflects increase CAPEX in both the growth of the service station network and FESCO’s entry into the LPG market.

Revenue growth

For the quarter ended June 30, 2022, FESCO recorded revenues of J$6.97 billion, which reflects a 187.7 per cent or J$4,548.36 million year-over-year increase. Several factors affect revenue/turnover with the supply price of fuel being a major component, included the fact that on average during this quarter, refinery prices have increased between J$52.30 & J$53.59 per litre for gasoline and J$75.70 –J$76.95 for diesel relative to the second quarter of 2021.

FESCO has no control over the supply price of fuel and instead, focuses more on quantity of fuel sold and gross profits. FESCO recorded gross profits of J$190.16 million for the quarter, which reflects growth of 158.9 per cent or J$116.71 million year over year.

The company’s year to date gross profits of J$406.25 million exceeds the gross profits achieved for the full year (12 months) ended March 31, 2022 of J$391.22 million by 3.84 per cent or J$15.04 million despite the second quarter (July – September) being traditionally one of the weakest quarters for the Jamaican fuel transport industry.

Operating expenses of J$65.70 million for the period and J$130.74 million year to date reflects FESCO’s expanded operations including operating a retail service station and increased expenditure on repairs and maintenance to improve our service station network. Staff costs, depreciation and advertising continue to be the main expense items.

FESCO recorded finance income for the quarter of J$4.81 million compared to an income of J$1.52 million last year, which reflects an increase finance income of J$3.29 million or 217.31 per cent. Year-to-date finance income is J$5.57 million compared to J$7.11 million last year, down 21.73 per cent.