Sales up 23%, while net profit is 10% higher
Regency Petroleum Company Limited (RPL) is making an impact already on its public shareholders recording good first-quarter results.
The Westmoreland-based company, which went public last December through an initial public offer (IPO) of shares recorded a 21 per cent climb in sales for the January – March quarter to J$183.48 million compared to J$152.16 million earned in 2022.
This was driven by increased volumes sold for its core LPG and gasoline products, as consumers became more familiar with the RPL brand, as the company aims to maximise its full potential with current capacity.
Gross profit went up 15 per cent to J$32.50 million. However, gross margins decreased from 18.62 per cent to 17.71 per cent.
This decrease has been attributed to increased trucking costs to deliver fuel to its various locations. The management is emphasising that, “The company does not control the market prices offered on petroleum products and instead directs its attention on volumes and gross profits.”
Big 105% jump in expenses
Total expenses for the quarter under review went up by 105 per cent to J$12.81 million, as RPL incurred higher accounting fees, bank charges, advertising and promotion expenses and Jamaica Central Securities Depository (JCSD) costs related to its listing on the Jamaica Stock Exchange (JSE). There was a donation expense of J$1.16 million, of which, J$750,000 related to the Jamaica Social Stock Exchange’s telethon.
After accounting for higher finance costs, profit before taxation declined by 16 per cent to J$19.74 million. However, due to RPL’s five-year tax remission as a newly listed entity on the junior JSE market, it did not incur income tax, which resulted in net profit being 10 per cent higher than the $17.91 million booked in 2022.
Due to the company having new ordinary shares related to its IPO, earnings per share declined from J$0.016 to J$0.014. RPL’s asset base skyrocketed by 156 per cent moving from J$176.45 million to J$452.19 million, as its non-current assets nearly tripled and current assets doubled.
The bulk of the increase was in property, plant and equipment related to work in progress on two of its new service stations, which were supposed to have been commissioned in January 2023. However, delays related to supply chain disruptions pushed the timeline further into 2023.
Part of the RPL’s receivables is related to a new LPG trailer, which is en route for delivery. The company’s cash position was J$49.83 million while total liabilities were cut in half to J$43.62 million with the management announcing that the company is now debt free in the current period.
Shareholders’ equity grew 353 per cent to $408.6 million as RPL gained 6,970 shareholders at its IPO in December and increased its retained earnings.