Service station chain, FESCO has seen its pretax profits jump by 55.5% for the June first quarter.

FESCO recorded profit before taxes of $39.9 million, representing an increase $14.3 million on the company’s profit before taxes of $25.7 million recorded for the first quarter of 2020.

Due to the listing of the company on the Junior Market of the Jamaica Stock Exchange, FESCO has started to benefit from 10 years remission of income taxes and thus incur reduced corporate taxes.

Accordingly, net profit for the first quarter is $39.9M compared to $24.1 million in 2020, an increase of J$15.9 million or 65.9%.

Shareholders’ Equity increased to $581.9 million up from J$231 million as at June 30, 2020 (151.7%) and up from $318.4 million from March 2021 (82.7%).

This reflects the combined effects of the net proceeds of the Initial Public Offer and increase in retained earnings.  Net current assets has improved to a total of J$336.4 million versus J$144.5 million (June 30, 2020) and J$88.6 million (March 31, 2021) and the company’s current ratio stands at 2.60 up from 1.62 as at June 2020 and 1.46 from March 2021.

This positive performance by FESCO comes despite the ongoing COVID-19 pandemic and all the attendant restrictions on travel, social engagements and general business activity, which presented a very challenging quarter for Jamaica and the retail petroleum industry in particular.

Expanding FESCO brand

On July 15, 2021 Fesco Ferry was “softly” and successfully opened with the Coores family being the owners and dealer of that service station at Ferry in St. Catherine. Later this year, FESCO plans to open its first company owned and operated service station, Fesco Beechwood

Both first quarter results (Q1-2021 and Q1-2020) were negatively affected by the Covid-19 pandemic. During both quarters, the frequency of complete and/or partial weekend lockdowns and extended curfew hours midweek severely restricted the operating hours of dealer stations and delayed FESCO’s expansion via new stations.

However, despite these challenges, FESCO still achieved strong growth and recorded solid achievements and improvements such as increased volume of fuel sold in litres for the quarter by 2.9 million litres or 29.5%. In addition FESCO increased gross profits by J$21.3 million or 63.4% vs. Q1: 2020.

Big jump in revenues

For the first quarter ended June 30, 2021 FESCO recorded revenues of $1.9 billion which reflects a 58.2% or $702 million increase above the similar period ended June 30, 2020. Several factors affect revenues with the supply price of fuel being a major component.

FESCO has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profits. For the June quarter, FESCO recorded gross profits of $54.9 million which reflects growth of 63.4%% or $21.3 million year over year above the similar period ended June 30, 2020.

For the first quarter, FESCO recorded operating profits of J$34.3 million which reflects a 37.6% or $9.4 million year over year increase above the similar period ended June 30, 2020. Operating and administrative expenses are up $11.9 million or 138.8% year over year ($20.5 million vs. $8.6 million).

This was due, in the main, to increases in advertising, professional and administrative expenses. Finance Income increased by approximately $4.9 million for the quarter when compared to June 2020 ($5.6million vs. $0.7million)