Cecil Foster Managing Director For FosRich Has Released The Following Report Of The Company’s Unaudited Results For The Three Months Ended 31 March 2023.

Financial Highlights

• Revenues – $1,083.8 million, up $183.5 million or 20% from $900.3 million in the prior period.

• Gross profit – $446.0 million, up $58.4 million or 15% from $387.6 million in the prior period.

• Operating profit – $138.9 million, compared to $158.9 million in the prior period.

• Earnings per stock unit – 2.42 cents compared to 3.16 cents in the prior period.

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.

Income Statement

Income
The company generated income for the first quarter of $1,083.8 million compared to $900.3 million for the prior reporting period. Gross profit for the year-to-date was $446.0 million compared to $387.6 million for the prior reporting period. These increases were attributed primarily to increased sales in six (6) of our eleven (11) Product Groups as follows: Transformer, Solar, LED, Hardware, Wires and Wiring Devices.

Administration Expenses
Administration expenses for the year-to-date was $260.2 million, reflecting an increase of $65.1 million on the prior reporting period amount of $195.2 million. The changes were driven primarily by increased staff related costs for salary adjustments, increased sales commission due to improved sales performance and improvements in staff benefits; increased travelling and motor vehicle expenses and increased insurance costs due to increases in policy renewal rates.

Finance Cost
Finance cost for the year-to-date was $47.4 million compared to $37.2 million for the prior reporting period, an increase of $10.2 million. This increase is being driven primarily by increases in Bond renewal rates and increases in bank financing.

Operating Profit
Operating Profit generated for the period was $138.9 million, compared to the $158.9 million reported for the prior reporting period.

Earnings Per Stock Unit
Earnings per stock unit was 2.42 cents, compared to the 3.16 cents reported for the prior reporting period.

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
With the increases in sales has come an uptick in 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.

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 $580 million. This increase is caused primarily by the secured and unsecured bonds, which were current at year end, but have now been refinanced.

Liquidity
At balance sheet date the excess of current assets over current liabilities amounted to $1,900 million (31December 2022 – $1,235 million), with an improvement in the ratio to 2.17:1, up from 1.69:1 at 31 December 2022. It is expected that FosRich will continue to be able to generate sufficient cash to meet obligations when they fall due. Liquidity is provided primarily from sales revenues and loan financing.

Shareholders’ Equity
Shareholders’ equity now stands at $1,906 million, up by $121 million from $1,785 million on 31 December 2022. The net increase of $121 million arose primarily as a result of retained profits for the year amounting to $122 million.

We now have 5,328 shareholders, an increase of 242 or 5% on the 5,086 on 31 December 2022.

Critical Accounting Estimates
Judgment is required in the estimating of expected credit loss for trade receivables, and an appropriate model to predict this loss, based on historic trends is being used. We do not anticipate any notable change in the assumptions underlying the model, or the credit behaviour of our customers.

Other Matters

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

As we report on the performance of FosRich, we thank our shareholders, employees, customers, and other stakeholders for their support as we continue to expand our business and bring greater value to our various stakeholders.

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