FOSRICH Company Limited Reports Strong H1 Results 

• FOSRICH Company Limited reported a net profit of J$297.97Mn (EPS$0.60) for the 6 months ended June 30, 2022, which represents a 160.2% improvement over the net profit of J$114.52Mn in H1 2021.
• Revenue for the 6 months was $1.80Bn, a 64.6% increase driven by higher business activity pushing sales in ten of their eleven Product Groups, with Panels being the only product group that registered a decrease over the prior year. Revenue growth outpaced the 56.3% increase in the cost of sales evidenced by gross margins moving from 39.8% to 42.9%. 
• Administrative expenses rose by 36.7%. The changes were driven primarily by increased staff-related costs for salary adjustments, higher sales commission, greater occupancy, increased selling, marketing and electricity cost; higher legal and professional fees; increased depreciation due to increases in the carrying values of property plant and equipment and increased security expense.
• Near-term profitability will be supported by continued efforts to manage the shipping challenges and revenues from recently acquired subsidiary O’N’S’ Mini Mart & Electrical Supplies. determining optimal inventory levels and cost of sales. The company continues to proactively manage inventory balances in light of supply-chain challenges, to ensure optimal inventory balances, relative to the pace of sales, to avoid both overstocking and stock-outs.
• FOSRICH’s stock price has decreased by 61.4% since the start of the calendar year largely due to a 10:1 stock split executed on July 26. The stock closed Tuesday’s trading session at $3.49 and currently trades at a P/E of 45.3x which is above the Junior Market Distribution Sector Average of 23.6x.

(Sources: JSE and NCBCM Research)