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Global partners now offering FosRich more favourable credit terms

Durrant Pate/Contributor

Lighting and energy company, FosRich is rolling out a 5-point turnaround plan, as the company saw its losses being racked up for the first quarter ended March 31, 2026.

Net Loss closed on $178.8 million, representing a 170% increase from the $68.6 million in the prior period in 2025, resulting in loss per stock unit of $0.04 compared to $0.01 at March 2025. In order to stem the hemorrhaging, FosRich is employing a 5-point plan to reverse the losses and return the company to profitability:

1. Sale and lease-back of real estate: We are currently engaged with our financial partners in a sale and lease-back transaction of our real estate properties. The proceeds of this transaction will be used to liquidate existing loans and provide cash needed to finance inventory purchases for operations. 

2. Molynes superstore: We anticipate commencing activities at our new Superstore by the end of Q3, which will contribute significantly to our top line and cash flows. 

3. Inventory rationalization: We have embarked on plans to further reduce stock items and to optimise our inventory levels. This is expected to bring some levels of cost reduction and improving efficiencies, whilst enabling the team to focus on high-performing products. 

4. Administration expenses: While we have been very frugal in our approach to discretionary expenses, we continue to critically review each item before expenditures are approved. 

5. Vertical integration strategies: We are pursuing opportunities and partnering with property developers with a view to maximizing the use of our products and services. We anticipate significant increase in sales from this initiative.

Holding inventories and credit tight

Since the start of the year, there has been the continued liquidation of inventories, as the company continues to proactively 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. 

This strategy has been adopted to avoid both overstocking and stock-outs. 

Monitoring is both at the individual product level and by product categories. As for receivables, the management continues to actively manage trade receivables with an emphasis being placed on balances in the over 180-day bucket. The management has implemented strategies to collect these funds, as well as to ensure that the other buckets are managed. 

FosRich has re-evaluated all credit relationships. Where necessary, credit limits have been reduced, and credit periods shortened. For some inventory items, the management has instituted seven day credit or cash. 

Trade payables are categorised by foreign purchases, local purchases and other goods and services. The company has concentrated primarily on the foreign payables, as the bulk of inventories are sourced from overseas. 

FosRich continues to manage payables, for the most part, within the terms given by suppliers. In the meantime, turnover numbers continue to be affected by the substantial fall in solar panel cost on the world markets, which affects the business. 

Suppliers offering fabourable credit terms

With the continuing uncertainties in the USA market, FosRich’s global partners, in seeking to broaden and deepen their relationships with their non-USA customers, have offered the company more favourable credit terms. As for non-current liabilities, these have been reduced by $26 million due to the run-off and maturing of facilities. 

Shareholders’ equity now stands at $1.314 billion, down from $1.493 billion as at December 31, 2025.