Cecil Foster Managing Director of FosRich Company Limited has released the following Management Discussion & Analysis And Summary Unaudited Consolidated Financial Statements for the Three Months Ended 31 March 2024.

Financial Highlights
• Revenues – $859.8 million compared to $1,083.8 million in the prior period.
• Gross profit – $389.5 million compared to $446.0 million in the prior period.
• Operating profit – $37.5 million, compared to $138.9 million in the or period.
• Earnings per stock unit – 1 cent compared to 2 cents in the prior period.

Income Statement

Income
The company generated income for the first quarter of $859.8 million compared to $1,083.8 million in the prior reporting period. The main revenue drivers continue to be the Electrical, PVC, Hardware and Transformer lines of business.

Gross profit for the first quarter of 2024 was $389.5 million compared to $446.0 million for
the prior reporting period.

Administration Expenses
Administration expenses for the year-to-date was $301.6 million, reflecting a 16% increased on the March 2023 quarter. The increased costs were fuelled primarily by increased staff related costs for salary adjustments, improvements in staff benefits, increased marketing costs, increased travelling and motor vehicle expenses and increased insurance costs due to increases both in policy renewal rates and exposure.

Finance Cost
Finance cost for the year-to-date was $8.3 million more than the corresponding period in 2023. This increase is tied to debt refinancing in a high interest rate environment and additional loan financing.

Operating Profit
The operating profit generated for the period was $37.4 million, compared to the $158.9 million reported for the prior reporting period resulting in an earnings per stock unit of $0.01 compared to $0.02 at March 2023

Balance Sheet

Inventories
The company continues to proactively manage inventory balances and the supply-chain, with a view to ensuring that inventory balances being carried are optimised, relative to the pace of sales, the time between the orders being made and when goods become available for sale, to avoid both overstocking and stockouts. Monitoring is both at the individual product level and by product categories.

Receivables
We continue to actively manage trade receivables with an emphasis being placed on balances in the over 180-day bucket. We have implemented strategies to collect these funds as well as to ensure that the other buckets are managed. We have re-evaluated all credit relationships. Where necessary, credit limits have been reduced and credit periods shortened. For some inventory items, we have instituted seven (7) day credit or cash. Sixty-seven (67%) of receivables are within the current to 60-day category, up from the sixty-two percent (62%) for December 2023.

Receivables also include advance payments made to foreign suppliers for the increasing levels of inventories required to support our sales strategy.

Trade Payables
Our trade payables are categorised by foreign purchases, local purchases and other goods and services.

While we have concentrated primarily on the foreign payables, as the bulk of our inventories are sourced from overseas. we continue to manage payables, for the most part, within the terms given by our suppliers.

Non-current Liabilities
Non-current liabilities have increased by $624.5 million with new financing in the current period being the catalyst for the change. This increase is caused primarily by net new finance obtained in the current period.

Liquidity
At balance sheet date the excess of current assets over current liabilities amounted to $2,871.3 million (31 December 2023 – $1,826.3 million), with an improvement in the ratio to 3.1:1, up from 2.1:1 at 31 December 2023. It is expected that FosRich will continue to be able to generate sufficient cash to meet obligations when they fall due.

Shareholders’ Equity
Shareholders’ equity now stands at $2,071.8 million, up by $30.2 million from $2,041.6 million on 31 December 2023. The net increase of $30 million arose primarily as a result of retained profits for the year amounting to $32.9 million.

On 31st March 2024 there were 5,359 shareholders, compared to the 5,373 at 31 December 2023.

Other Matters

New Activities
Construction of our new FosRich Superstore & Corporate Offices at 76 Molynes Road is advanced with completion date projected to be Q2, 2024.

Business Overview
FosRich is primarily a distributor of lighting, electrical and solar energy products. FosRich aims to differentiate itself from its competitors in the Jamaican marketplace by providing a quality and cost-effective service, and by collaborating with clients on technical solutions. FosRich partners with large global brands seeking local distribution such as Huawei, Philips Lighting, Victron Energy, Siemens, NEXANS and General Electric.

FosRich has a staff complement of over one hundred and seventy (170) persons across nine (9) locations in Kingston, Clarendon, Mandeville, and Montego Bay. FosRich also has a team of energy and electrical engineers who offer technical advice and install solar energy systems, solar water heaters and electrical panel boards.

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