Fosrich Company Limited [JSE: FOSRICH] lights the way again with bright first quarter results for the period ending 31st March 2018. The company for the first time delivered a whopping JMD$30.8 million compared to JMD$15.6 million in the prior period. Moreover, this was aided by other income benefiting from foreign exchange gains.
Fosrich recorded revenues of JMD$271.8 million for its first quarter since listing, recording a decrease of 7.71 percent when compared to the same quarter in 2017. Furthermore, this decrease in revenue was beyond the company’s control as product prices have seen some downward movements in international markets.
The Company saw a sharp increase in its net profit of 103.97 percent and an increase in its net profit margin 24.1 percent when compared to the prior year of 5.15 percent. This was aided by a gain of JMD$7.8 million from foreign exchange and benefits of tax exemption from listing on the Junior Stock Exchange.
Furthermore, the company has displayed noteworthy financial management year-to-date having cut expenses by 9.61 percent from JMD$118.6 million to JMD$107.2 million. In addition, Fosrich increased its Return on Assets (ROA) by more than 50 percent in quarter one (Q1) of 2.27 percent compared to 1.38 percent in the prior quarter.
Similarly, the company increased its Return on Equity (ROE) to 4.81 percent when compared to 3.66 percent in the prior quarter. Also, the company has deceased is Debt/Equity ratio to 0.5x from 1.6x in the prior quarter compared to 1.1x in Q1, as a result of the increase in Shareholders Equity of 5.1 percent. However, non-current liabilities have increased by JMD$274 million due to the company obtaining a new line of credit to assist with the financing of operations.
In addition, Fosrich reported a strong growth in its cash and cash equivalents for Q1 of 468.24 percent, as a result of listing on the JSE. Currently Fosrich has a Price/Earning (P/E) of 14.43x.
Fosrich is a distributor of lighting, electrical and solar energy products, partnering with global lighting companies such as Philips Lighting, Siemens and General Electric (GE) to name a few. Moreover, the Lighting industry is viable one with the increasing demand for efficiency and reducing cost of electricity through energy saving products. We at SSL strongly recommend Fosrich as a buy.
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