Revenues surged J$12.67 billion, reflects a 116.4% or J$6.8 billion year over year increase

Durrant Pate/Contributor

Retail service station operator FESCO ended its March 2022 financial year on a high exceeded many of the targets set for the year.

Managing Director Jeremy Barnes reports that, “despite a year in which the COVID-19 pandemic restricted travel, social engagements and general business activity, the company recorded its best year and achieved 7.94 per cent market share in March 2022 for transportation fuels, exceeding our target of 7.5 per cent”.

In addition, FESCO exceeded last year’s 12 months profit after tax performance by 134.5 per cent or J$145.48 million, reaching J$253.64 million.

FESCO achieved growth in profit after tax for each and every quarter at quarterly growth rates of 43 per cent, 29 per cent and 18.3 per cent respectively. However, FESCO all but achieved its 12-month profit after tax forecast of J$253.6 million versus J$263.9 million, despite extended curfews, restricted opening hours, logistic related construction delays which caused the openings of both FESCO Ferry and FESCO Beechwood to be behind schedule.

The retail service station operator declared an interim dividend of J$0.01 per share totalling J$25.0 million payable on June 24, 2022 and during the year raised J$1.0 billion in debt via a bond arranged by NCB Capital Markets to finance its network expansion of service stations and LPG assets acquisition.

Big jump in revenues

For the year ended March 31, 2022, FESCO recorded turnover/revenues of J$12.67 billion, which reflects a 116.4 per cent or J$6.8-billion year-over-year increase. Several factors affect revenue/turnover with the supply price of fuel being a major component.

Barnes explains that “between April 1, 2021 and March 31, 2022, Petrojam Kingston refinery prices, E10 87 increased 41.3 per cent or J$55.89, E10 90 increases 42.0 per cent or J$58.07, ADO increased 54.5 per cent or J$69.45 and ULSD increased 52.7 per cent or J$69.53. FESCO has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profits”.

For the year ended March 2022, FESCO recorded gross profits of J$391.216 million, which reflects an increase of J$196.4 million or 100.8 per cent compared to J$194.8 million in 2021. For the year, operating profits are up J$120.3 million or 89.3 per cent to total J$257.9 million.

FESCO recorded finance income of J$2.94 million compared to J$6.09 million in the previous year which represents a J$3.2 million or 51.8 per cent decrease. This was mainly as a result of increased borrowing costs and lower unrealised foreign exchange gains, owing to a revaluation of the Jamaican dollar in March 2022.

For the year ended March 2022, FESCO recorded profit after taxes of J$253.64 million, which represents a 134.5 per cent increase or J$145.48 million improvement on the company’s profit after taxes of J$108.16 million for the year ended March 31, 2021. FESCO incurred income taxes of J$4.24 million.

Book Value or Shareholders’ Equity as at March 31, 2022, increased by J$452.17 million or 142.0 per cent to sum J$770.59 million, up from J$318.4 million as at March 31, 2021. The increase includes a dividend declaration totalling J$25.0 million, and reflects the combined effects of the net proceeds of the April 2021 initial public offer of shares and an increase in retained earnings.

Net current assets as at March 31, 2021, has improved to total J$636.66 million versus J$73.6 million last year. The company’s current ratio stands at 1.63 (March 2022) up from 1.35 as at March 2021. As at March 2022, the Company’s Debt to Equity (D/E) (static) is 1.31 which is an increase from March 2021 which substantively reflects the J$1-billion bond raise (March 2021 D/E was 0.08).