FESCO’s Q2 Earnings Up in Q2 by 20.9%

  • Driven by strong revenue growth from its expanded operations, Future Energy Source Company Limited (FESCO) recorded a net profit of $205.82Mn for the three months ending September 2025, a 20.9% increase relative to the same quarter in 2024, marking its best quarterly performance to date.
  • Revenues grew 5.8% year over year to $7.93Bn, despite lower fuel prices, as volume increased (7.1% YTD). FESCO has no control over the supply price of fuel; instead, the Company focuses more on the quantity of fuel sold and its pricing to attract customers.
  • Cost of sales grew by 4.7% to $7.83Bn, reflecting both high ex-refinery prices for gasoline and the increase in volumes. However, with revenue growth outpacing the growth in costs, gross profit increased by 23.3% to $506.98Mn, which translated into a 95 basis points (bps) increase in gross profit margin to 6.7%. The improvement in gross profit reflects both increasing throughput (measured in litres of fuel sold) and diversification of product offerings and services (increased retail presence).
  • Meanwhile, operating expenses totalled J$313.93Mn (+24.8%), reflecting an expanded asset base, including increased LPG and service station assets, alongside a larger number of operating sites, such as FESCO Oval, for a full quarter. An 18.5% staff cost increase to J$113.20Mn, was the biggest contributor, given an expanded workforce and wage adjustments.
  • Fesco’s Q2 numbers contributed to 6M earnings growing by 8.3% YoY. Management anticipates that FY2026 earnings are on track to surpass its FY2025 results by December 2025 with three months to spare.
  • FESCO and several of its dealers (FESCO and FESGAS) sustained property damage as a result of Hurricane Melissa, with the total cost still undetermined. However, as of November 5, 2025, all but one of its FESCO-branded stations had reopened. Moreover, the Company anticipates opening one to three new dealer-operated service stations before its financial year ends in March 2026. These expansions could boost revenue and bottom-line growth, ultimately delivering more value to shareholders.
  • FESCO’s stock price has decreased by 24.8% since the start of the calendar year, closing Tuesday’s trading session at $2.88. It currently trades at a P/E of 14.8x, which is significantly below the Junior Market Distribution Sector Average of 26.6x.

(Sources: JSE & NCBCM Research)