Fesco crushes expectations

FESCO recorded stunning first results that crushed expectations, with revenues surging 238 percent to $6.46 billion, up from $1.9 billion in 2021 and drove gross profits up a robust 294 percent higher at $216 million for the quarter from $161 million year over year. June quarter gross profit came in 36 percent more than the $137 million generated in the March quarter this year from revenues for the quarter of $4.76 billion.
The Company’s gross profit for the quarter amounts to 55.2 percent of the gross profits achieved for the fiscal year ended March, exceeding the entire year. Gross profit margin jumped sharply from 2.87 percent in 2021 to 3.36 percent in the June quarter this year. The Company benefitted from two new service stations that came on stream during the period compared to the 2021 fiscal period, with the popular Beachwood avenue station owned and operated by them.
For the quarter ended June 2022, profits after taxes surged 280 percent to $152 million from just $40 million in 2021, with indications that the six months result should see profits exceeding the $258 million realized in 12 months to March this year.
Operating and administrative expenses rose 216 percent to $65 million in the quarter, with the bulk of the increase being direct operating costs for the self-owned run gas station.
Gross cash flow brought in $158 million, but $358 million was spent for the addition of fixed assets and resulted in net cash outflows of $221 million, thus reducing the $1.1 billion at the start of the fiscal year to $900 million at the end of the quarter.
Current assets ended the period at $1.64 billion, including trade and other receivables of $468 million, cash and bank balances of $903 million. Current liabilities stood at $1.3 billion, with Payables at $947 million, current portion of loans at $345 million, and long-term loans at $908 million.
Shareholders’ Equity stood at $922 million at the end of June, or 37 cents per share and the stock trades at a premium of 1,334 percent above net asset value.

Fesco Beachwood Avenue station

Earnings per share came out at 6 cents for the 2022 quarter, up from 1.65 cents in 2021. IC Insider.com is forecasting 26 cents per share for the entire year bringing the PE ratio to 20 times earnings and is now in line with the market at the last traded price of $5.29 on the Junior Market of the Jamaica Stock Exchange on Friday. The Company will pay 16 cents per share dividend on October 28.
The Company added the 17th service station under its brand in St Elizabeth, which will add to future revenues and profits. According to the directors’ report,” the Company continues to make investments in real assets and equipment to support expanding its service station businesses, its industrial client business, as well as its promised entry into the LPG industry.”

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