HIGHER fuel costs and increased sales volumes have contributed to the improved revenue performance of Future Energy Service Comany Limited (FESCO) for the year ended March 31, 2022.

The company reported a 134 per cent improvement in net profit for the 12 months, totalling $253.64 million, on the back of a 116 per cent increase in revenue over the same period. Revenue for 2022 was $12.67 billion.

Responding to queries from the Jamaica Observer about FESCO’s full-year performance, Chief Executive Officer Jeremy Barnes confirmed that there were significant increases in sales volumes across the company’s network of service stations.

He added that while the gasoline retailer’s new service stations at Ferry and Beechwood Avenue in the Corporate Area did not have a full year of operation, “those two have contributed significantly and continue to do so”.

Following the listing of FESCO on the Junior Market of the Jamaica Stock Exchange (JSE) in April 2021, the company added the Ferry service station to its network on July 15 and the Beechwood Avenue outlet on November 2.

“Throughout the year we did introduce E10-88, which is a blended product, at Beechwood Avenue, which we are happy with the reception we’ve gotten from the public. We anticipate that it will continue to do well,” Barnes informed Sunday Finance.

He, however, refrained from commenting on whether the company will introduce the blended fuel at other service stations in the current financial year.

When quizzed about plans to open other service stations in the current year Barnes said, “Within the next 18 months we’re looking to have three more stations, with one [in St Elizabeth] due within the next 30 days.”

Earlier this year Barnes, during a Mayberry Investment Forum, shared that FESCO will also make its foray into the liquiefied petroleum gas market. He told Sunday Finance that the company has set a timeline for April 2023 to add this new business line.

In the meantime, FESCO’s cost of sales grew in line with revenue as the cost of crude, which continues to hover above US$100 per barrel, maintains its impact on prices at the pumps locally. Increases in haulage costs also factored in the increase.

The company’s operating expenses also jumped by 125 per cent as the addition of new service stations and listing on the JSE came with their own costs.

“We have increased management capabilities and we have increased staff complement. There are also new charges as it relates to Beechwood Avenue in terms of security costs and all sorts of other overheads,” Barnes explained.

He pointed out further increases in depreciation and insurance, as well as directors’ remuneration and committee compensation.

Commenting on the overall performance of the company the CEO said, “We do see where the work we put in has paid off, and going forward we see these trees continuing to bear fruit.”

He added that in the context of contractions in the fuel industry, the company managed to fare well in the novel coronavirus pandemic while constructing new service stations and listing on the Junior Market.

In terms of outlook for the current year, Barnes expects FESCO will continue “along the same trajectory”.

“We anticipate improved performance each quarter going forward,” he stated, adding that he expects “significant growth” across the network of service stations.