FUTURE Energy Source Co Limited (FESCO) is asking shareholders to hold strain for now as it pumps more into its expansion efforts. While shareholers can anticipate increased profitability, dividends will not be disbursed this year, extending into the following year.

Managing Director Jeremy Barnes explained that the decision is influenced by the prevailing economic environment, characterised by interest rates that are unfavourable for borrowing.

“The next dividend payout will be substantially stronger and of a greater nominal size,” Barnes assured, during a recent earnings call.

Although FESCO is avoiding high-interest rates, it intends to access the debt market for the construction of the proposed FESCO Oval on Spanish Town Road in St. Andrew. According to Barnes, from a cash flow standpoint, the company generates enough to finance the project. However, its capital expenditure for the upcoming year is significant as it has other plans in the pipeline to execute.

“We have many more of these activities planned, but we’ll keep you informed as they become more material and real,” stated Barnes.

After achieving a milestone with a record-breaking gross profit exceeding one billion dollars, fuelled by its relentless expansion efforts, Barnes expressed satisfaction with the remarkable 76 per cent increase in only nine months. The substantial growth is closely tied to FESCO’s ventures in the cooking gas market through FESGAS and its service stations, accumulating nearly $3 billion in assets for the third quarter of the financial year 2023. Anticipating continued expansion, FESCO expects its plant, property, and equipment (PPE) to increase in the coming quarters across the island, encompassing both gas stations and liquified petroleum gas (LPG).

“To build out the LPG is very capital-intensive and PPE-centric. Again, we’re going to be building out our FESCO Oval service station, leading to an increase in capex and expanding PPE regarding service station space. Additionally, we will be spending on and increasing our investment in LPG,” Barnes explained while breaking down the company’s assets.

Despite FESCO’s commitment to supplying every home in Jamaica with LPG cooking gas, Barnes acknowledged that this venture will take time to ensure each home has two cylinders for replacement when supplies are exhausted.

As for the FESCO Oval expansion, a project initiated two years ago and now an active endeavour slated for completion within a year, Barnes sees it as just one among many others to come. The proposed service station aims to be a “destination station,” offering various amenities like a drive-thru quick-service restaurant [QSR], convenience store, ATM, and a six-a-side turf football field for community use.

“We’re a sports-loving company, so we also want to use the facilities,” he said with a smile.

FESCO Oval’s comprehensive offerings include a homework centre, free Wi-Fi, and a small LPG depot to supply neighbouring areas. The QSR restaurant will provide all grades of fuel, enhancing the overall environment and convenience.