August 8, 2023

Fosrich Company Limited (FOSRICH) for the six months ended June 30, 2023 reported a 13% increase in Revenue totaling $2.02 billion compared to $1.80 billion in the corresponding period last year. Revenue for the Second quarter had a 5% increase to close at $940.85 million compared to $898.80 million for the comparable quarter of 2022.

Cost of Sales amounted to $1.21 billion (2022:1.01 billion), this represents an increase of 19% year over year. Consequently, gross profit increased by 4% to $817.85 million compared to $788.41 million for the six months ended June 30, 2022. The Company booked gross profit of $371.84 million for the Second quarter versus $400.82 million reported for the similar quarter of 2022. Management noted, ” These increases were attributed primarily to increased sales in eight (8) of our twelve (12) Product Groups.”

Other Income decrease by 53% to close at $2.50 million (2022: $5.26 million).

Administrative and other expenses have increased 30% from $405.12 million in 2022 to $526.74 million in the period under review. Management noted, “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; increased insurance costs due to increases in policy renewal rates and increased depreciation due to increases in the carrying values of property plant and equipment.”

As a result of increased bank financing and Bond renewal rates, finance cost grew 19% to total $108.01 million (2022: $90.58 million).

Profit before taxation for the six months ended June 30, 2023, amounted to $185.60 million, a 38% decrease relative to $297.97 million reported in 2022. Profit before taxation for the Second quarter amounted to 46.62 million (2022: $139.08 million).

Taxation for the six months ended June 30, 2023 amounted to $23.11 million (2022: nil), whereas for the quarter, taxation was $5.84 million (2022: nil). Net profit for the six months amounted to $162.50 million, a 45% decrease from the $297.97 million reported in 2022. For the Second quarter, Net profit was $40.77 million (2022: $139.08 million).

Consequently, Earnings Per Share for the six months amounted to $0.03 (2022: EPS: $0.06), while Earnings Per Share for the quarter totaled $0.01 (2022: EPS: $0.03). The twelve-month trailing EPS was $0.04 and the number of shares used in these calculations was 5,022,755,550.

Notably, FOSRICH’s stock price closed the trading period on August 08, 2023 at a price of $2.17 with a corresponding P/E ratio of 57.60x.

Balance Sheet Highlights

The company’s assets totaled $5.08 billion (2022: $4.69 billion). The increase in total assets was due to increases in ‘Due from related parties’ which grew 47% to $599.87 million (2022: $407.55 million). ‘Inventories and goods in transit’ rose 11% year over year to $1.89 billion (2022: $1.70 billion). Also, ‘Other Receivables and prepayments’ increased 91% to 224.85 million (2022: $117.65).

Shareholder’s equity was $1.94 billion (2022: $1.82 billion), representing a book value per share of $0.39 (2022: $0.36).