JUST under a year since listing on the Junior Market of the Jamaica Stock Exchange, Future Energy Source Company Limited (Fesco) is reporting monumental increases in revenue and profits, owing to the increase in the cost of petrol.
“We are proud to report that despite the ongoing COVID-19 pandemic and all the attendant restrictions on travel, social engagements and general business activity…the company has performed consistently with, and is on pace to meet its 12-month forecast, per our IPO prospectus,” directors outlined in a report to shareholders.
For the quarter ended December 31, 2021, Fesco registered a 250 per cent increase in net profit, which moved from $20.99 million in 2020 to $73.64 million. This was achieved on the back of 139 per cent increase in revenue for the September to December quarter that reached $3.68 billion.
Over the nine months, revenue jumped 83 per cent to end at $8.01 billion. At the same time, the company reported net profit of $170.8 million, reflecting an increase of almost 141 per cent.
Net profit for the nine months ended December 2021 exceeded Fesco's performance for the entire 2020 by 57.9 per cent or $62.6 million, the directors shared, attributing the achievement to several factors, “with the supply price of fuel being a major component.
“Fesco has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profits,” they continued.
During the period under review, the company's costs also increased, but not as significantly as revenues and profit. Operating expenses for the April to December 2021 period was $89.5 million compared with $58.7 million a year earlier.
Looking ahead, the company anticipates that revenues will continue to rise as the Government of Jamaica discontinues the use of total lockdowns and no-movement days as measures to contain the novel coronavirus, resulting in longer opening hours.
“We believe that the expected resultant increase in travel and commerce could potentially result in favourable prospects for our business,” the directors' report outlined.
Additionally, the increase in service stations will also contribute to revenue growth and profitability. To this end, Fesco is banking on an uptick in non-core business at its recently opened Beechwood Avenue, St Andrew outlet.
“…by March 1, 2022, Fesco will earn additional income from the opening of its company operated FYC Refill Water Store and its FYC Express Mart convenience store at its Fesco Beechwood Avenue service station,” the directors stated.