Regency Petroleum Company Limited (RPL) Earnings Call Transcript & Summary

Welcome to another RPL, Regency Petroleum Limited, Earnings Call. The second quarter for RPL ended on June 30, 2024, and the team, Andrew Williams, CEO; and Jerry Grant, Financial Controller, are here. They are here today to talk about the results and to share where the company is looking to go next. If you are a shareholder, then you would certainly want to be here for this call. You want to hear what the team has to say. If you are a non-shareholder and you're considering becoming a shareholder, you also want to be here. This is a part of RPL's commitment to transparent communication with their shareholders and to continue building trust, to continue building on their legacy. So we invite you to listen into this call and to have your questions prepared for the question-and-answer section, where you will get to ask directly your questions to the CEO and Financial Controller of RPL. The company would have reported 86% increase in net profit quarter-over-quarter, and that is pretty significant. So we are here today to see how they've done it and what they plan to do next, so that you, as their shareholders, can be informed in your decisions. Please help me in welcoming Mr. Andrew Williams, CEO of Regency Petroleum Company Limited, to the platform.

Thank you, Renate, for having us again.

I'll hand over to you, Andrew, for you to go ahead and host your call. Thank you for doing this as always.

Thanks again. I welcome once more, everyone, to our earnings call for Q2 2024, and we'll start by having a word of prayer. Let us pray. [Presentation]

Okay. Welcome once more. And thank you again to the Learn, Grow and Invest team for facilitating this process and these calls where we can share with our shareholders. All right. So let's get right into it. For Q2, we are quite pleased to announce our sales have increased 168% quarter-over-quarter. So Q2 2023 in comparison to Q2 2024, we have seen a 168% increase, which I would say aligns with what we have been speaking about prior to now and our expectations, our targets. So we are pleased to be announcing what we have targeted and even exceeding what we have targeted. With regards to Operating profit, gross profit, net profit, we can see significant increases there. Gross profit up $61.53 million. It's up 121% (sic) [ 127% ] from quarter-over-quarter Q2 2023. And most of all, our net profit has increased, up 86%. So we are now seeing $26.4 million in net profit, which is quite significant for the company as we continue to grow. We also are pleased to be fulfilling what we have spoken about and what we have been talking about. So we have had another significant achievement for us, where we have had our first franchise location, which is located in Westmoreland on the main road from Westmoreland to Montego Bay. So it's Whithorn district. And we are quite pleased to announce that we have had our first franchise hold up, and we can talk further about that later on in the session. Spanish Town Road, there was a delay. There have been delays, but we are quite optimistic as stated above of our September opening. We have had numerous sort of delays at what we were expecting, but we are still looking forward to our September opening. Our revenue increased 144% to $886 million. Our total expenses rose by 164%, landing at $66.62 million, and our earnings per share increased from $0.024 to $0.042. We'll discuss further with my FC, we'll go into the financials shortly. And we also had something new within the company where we announced our Sunday closures. Again, we will discuss further in the session, but we are now closed on Sundays, primarily, which I must state, to recognize what God has done for the company. So it is in recognition of the Lord for this Sunday closure. That is the primary purpose, just to recognize what God has done for the company, and we have so chosen a day for that recognition and for rest and worship for employees also. We can now move on to our FC, Mr. Jerry Grant. He will go into the financial highlights.

Thank you, Mr. Williams. Thank you Learn and Grow (sic) [ Learn Grow Invest ] team, and good morning to our shareholders. Well, my chat is showing all green this morning, and I'm pleased. Operating revenue up 168%, as we have mentioned before, which has brought our second quarter figures to $481 million. Our gross profit up 127%, that's significant increase, bringing our gross profit from $27 million in previous quarter to quarter 2 of this year, $61 million. Our profit before finance costs, that also increased significantly, 93%. It's now reflecting $28 million. Profit before taxation 86% change positive, showing $26 million for quarter 2, 2024. And our net profit, 85% (sic) [ 86% ] increase, significant increase. So our net profit is now reflecting for quarter 2, $26 million. Okay, this is a representation of what I was explaining on previously. That's a chart. We go to the next slide. Okay. Our balance sheet is looking pretty healthy also. Our cash resources is reflected at $19 million. Previous quarter, it was $13 million, so that's an increase. Our property, plant and equipment, significant increase also due to our investment in the gas station is reflecting of $431 million. In 2023, quarter 2, it was reflecting $348 million. Our accounts receivable, $130 million, it's now reflecting $123 million, trending down. I must reiterate that a significant portion of our accounts receivables would include a portion for deposits and lease. So we are managing our trade receivables diligently and it's not a matter of concern to us at this moment. Our long-term borrowings in 2023, that's last year, it was just reflecting tranche 1 of the bond, $92 million. Current quarter here now is reflecting the full portion, which is $215 million. So that's an increase of accounts payable significant increase. And again, that would have been due to the additional gas stations that we have opened. So that is in line with business and growth of the operation. Okay, just looking at the graphical representation of what we just explained. Okay. Our cash flow from operation is trending down. The outflow is trending down due to our increase in cash earnings from the operation. It was $77 million outflow in 2023, it's coming down to $36 million. So we are looking towards a positive figure in the near future. Cash used by investing activities $96 million in quarter 2023, and that would have reflected a lot of investment in the gas station. It's coming down in quarter 2024, we are working mainly on the construction aspect. So a few cash outflow in that regard. Cash used in financing activity, 2023 quarter positive figure reflecting the inflow of the bond. For 2024, there would not have been any payment on the principal of the bond. So what we are seeing here is just payment and finance lease, small figure, $227,000. So that impact is reflecting right now on the cash used in financing activities. Okay. I would now turn over to Mr. Williams to continue his company outlook.

Thank you, Jerry. Okay. So with regards to our outlook, company's outlook, we are looking forward to our proposed service stations. We are currently in negotiations to have proposed service stations on the South Coast of Jamaica. And we are always looking. So we are in various different negotiations currently, and we are looking to have, in very short order, approvals to have our service stations opened on the South Coast. So currently, I would say, we are dominant in Westmoreland, and we have one opening shortly in Kingston. But as I always say that we are seeking expansions across the island. We want Regency Petroleum to be a household name. And we are seeking to expand across the island. So we have opportunities that will come across our desk, our table, and we are taking advantage of these opportunities. So we are looking to expand on the North Coast and on the South Coast. But currently, in the short term, our outlook is in regards to our expansions. And we always invite -- we have had recently our first franchise rollout. We're looking forward to others to come on stream and come on board and join the Regency team and join the Regency company, because we are a Jamaican-owned company and we want our Jamaicans to benefit, our Jamaican businesses to benefit, our Jamaican service stations to benefit. So we invite companies, individuals, businesses to come on board and join us in this industry. So we're talking about both for automotive fuels and LPG cooking gas. But currently, our outlook is with regards to expansion on the automotive retail side of our industry, of our business. And we're looking forward to very shortly having approvals to have a service station on the South Coast. And we are also in negotiations for locations on the North Coast also. So that's our current outlook. And we want to grow across the country. I can't say it enough. We want to grow across the country. We're expanding our team. We are employing Jamaicans to work in a Jamaican-owned company. So as we grow, we'll provide employment and social and economical development for these communities or whichever regions or areas we may enter. We are a Jamaican-owned company and we want to include Jamaicans. So we look to expand our team and have a fully Jamaican-owned working company, Jamaican-owned company meaning that we have shareholders who are Jamaican. So it's a publicly listed company. So to invite always have Jamaicans, and it's the right time now to become a part of Regency Petroleum with regards to stock exchange and the cycle and the field that the stock exchange is in. I would say this is the right time to become a part of Regency Petroleum. If you follow the stock market, you'll see this a cycle usually, and we are in a certain part of the cycle, which will change over time. And in my opinion, it's the best time now to own a piece of Regency Petroleum, because probably as time goes on and the expansions and the growth, it's going to be more difficult or more challenging, more cost probably to own a part of Regency. So thank you again to our shareholders. And we're moving to our question and answers now. We invite any questions that you may have.

All right. Fantastic. Thank you so much, Andrew and Jerry, for the presentation. Thank you, as always, for the transparency and for continuing to inform your shareholders. So I have 2 questions before we jump into the questions from the audience. And the first one is really about the Sunday closures, right? So it is a bold move to decide to close on a Sunday when you have a have a business like yours, right, when it is that you're dealing with whether the gas stations or the cooking gas segments, the LPG, because people will tell you that cooking gas finish on a Sunday very often, right? So why Sundays? Well, that is the question from the audience, why choose to close on a Sunday. But I also wanted to ask you as a second part to that question, how do you see that impacting your revenue as a company?

Okay. So the first part, let me see if I understand it correctly, the first part is why did we choose to close on a Sunday and why a closure? Okay. So Regency Petroleum was initiated -- started business in 2018. and we are now in 2024. In 3 years after inception, we were listed on the stock exchange. And after being listed for 2 years, Regency Petroleum has achieved significant -- well, has had significant achievements in growth, particularly. And I would say this is primarily due to our faithfulness to the Lord and our inviting him into the company to be a part of the company also. And with all the achievements and all that we have -- well, everything that Regency has done and achieved, I would say, in my opinion, the least that we could do in terms of our appreciation to the Lord is to recognize him, choose a day in recognition of him and what he has done for the company. Now chosen to close on a Sunday, I can say, the primary focus is not that we choose to close on a Sunday, but is the fact that we choose to recognize what God has done to the company or for the company. And it so happens to be fall on a Sunday, right? Now we're a publicly traded company. Profits are very important, are significant within the company and to our shareholders. So it's an evaluation process. Now we try to balance -- it is a balancing act for us. So we look -- and Sunday would have been -- I mean, within the industry, Sunday would have been one of our least profitable days, for argument sake. It's not as busy as a day in the week. So with all these evaluations, I would say, all right, we're going to choose a day and try to balance what we are doing as a profitable company or to be a profitable company and to also recognize what God has done. We decided to choose to close and recognize the Lord on Sunday. So it is basically after doing some due diligence, some evaluation, some assessments to try to balance both profits and to recognize the Lord, what he has done, because he has really done a lot for the company. And I mean, especially in these times where we have many challenges economically, socially, I mean, just worldwide, globally, what we are seeing now, we have never seen it before, has never been seen before from our ancestors gone by. So what we are experiencing now in this world, the entire world, the operations, the global markets, whatever, socially what we are seeing, we have never seen it before. And it is my opinion that as a Christian-based company, we need to make a stand. We cannot tell anyone what to do, but we have a company, so we can put policies and regulations, rules within our company. And so in order to play our part, we have set certain policies and regulations and rules. And that's where we're coming from with the Sunday closure. So I don't want to dwell too much on a Sunday closure. I think that probably -- I don't know, that's what we are dwelling on a lot, Sunday closure. But what we should focus on is the fact that we are taking a day to recognize what the Lord has done for us and also our staff members. I mean, it's a day for rest and worship. So we hope that our staff members will take the opportunity to take some rest, spend time with family, and worship also. And we take a step further, because we have plans to also probably -- well, not probably, we have plans to broadcast church services at the location, so you kind of drive in. So it's basically you drive in, you don't have to dress up. We want to encourage you to come into worship. So it's like drive in. You can drive in. You don't have to dress up in your suits or whatever. You get up, drive in your family, your children, your kids, and probably take in 30 minutes service. It can be any denomination service. I mean, anything. I mean, we will broadcast some of our services throughout the course of the day. So that's the next step we want to move towards. So as I said, it is primarily to recognize what the Lord has done for the company and for...

Yes, absolutely. Thank you. So while I'm aware of it, I know that there are persons who may not have been aware of your why. And that's why I wanted to bring that to the fore for there to be an appreciation of the why. And Omar said it in the chat that Chick-fil-A is closed on Sundays and they're fine. And it is indeed scriptural, "Seek first the kingdom of God and His righteousness, and all other things will be added on to you." So we do know that on principle, on Biblical principle, it is -- well, it will be good. Another comment from the chat says that they respect your position on closing on a Sunday. Anything that is done in an attempt to honor the Lord, he will bless. You have my support. What doesn't make financial sense still can make Godly sense. So I believe you do have the support. And while there are others who may not have the same stance, may not have the same beliefs, as you rightfully said, you have a company and you're able to put these things in place in order to honor the Lord and to continue standing on faith. So thank you for that. So I want to jump into the questions from the audience. I do have one other question, but I'll hold mine until after we get through the questions from the audience. So the first one is from Tran, and he says, what restrictions, if any, prevent RPL from refilling another company's branded tank? Is it against any law to keep those other tanks for a prolonged period before returning them?

Okay. So yes, there are restrictions for companies, marketing companies not to refuel other branded tanks. I would say it's an MOU that we would have. We have an understanding that we are not supposed to fill. I mean, requests can be made within marketing companies in certain situations, but the norm or the understanding is that marketing companies should not. And you can understand why, because when it comes down to household cooking gas, in particular, the 25 pounds, 100 pounds, 30 pounds, they are quite costly for a marketing company to invest in. As I always speak about the capital expenditure on the LPG, especially household cylinders. It's quite costly. And if you as a marketing company invest hundreds of millions, in some cases, billions of dollars in these cylinders and to have other marketing companies just going on their own and refueling them without capital outlay, it is really unfair to the marketing companies spending these large sums of money for the other marketing companies. So yes, there are actual fines if you are caught doing so. So that's totally and absolutely discouraged within the industry. And as I said, primarily because of the capital outlay that the whichever marketing company would have put out for their cylinders, for their particular cylinders. And there are a number of other stuff like safety and all those stuff, which will be responsibility of the marketing company to an extent.

Understood. Understood. Next question is, what are the plans for growth of the LPG business line?

We have certain strategies in place for LPG. It has been growing. If you look at our financials, you'll see growth in the LPG, but we are growing the LPG organically, again, due to the capital expenditure. We have to be prudent in our spending and our capital, especially on capital. So currently, our focus in terms of our significant capital expenditure, our huge expenditure would be towards service stations. However, whatever profits are earned from our LPG sector will be reinvested or is being reinvested into the LPG. So yes, we are growing in the LPG industry. Again, there are huge challenges, many, many, many challenges with the LPG industry with regards to the household. So we are growing the bulk, because we are all across -- we have the infrastructure in place to provide bulk petroleum across the island. So we are marketing all petroleum across island. We are doing some marketing currently, and we are doing some employment. So we're seeking employees more for Kingston sales representatives in the Corporate Area. So for the bulk petroleum primarily. So we are focusing on the Corporate Area currently, because a huge market there with regards to bulk cooking gas. So that's where we are growing now, that's where we are heading now, towards the Corporate Area. We have our JusGas franchise agreement that we had last year as part of this growth, our entrance into the Corporate Area, where the market is huge. So we want -- and the market share is there for us to get our part off. So we want our share of the market in Kingston when it comes on to bulk. So we are growing that. For the household, we grew it organically. As profits grow, we reinvest into the company, purchase cylinders. As you can see on our balance sheet, our asset has been growing with regards to our cylinders. Yes. So that is...

Right. Thank you for that. As a follow-up, there is another question about the status of the JusGas partnership and if that is producing the expected results.

Yes. Well, for JusGas, we are seeing some -- we saw, in the initial stage, a lot of increase in the bulk petroleum, but it is very challenging. So what we find is that the competition is now responding. So yes, we set out -- I don't know if we -- I mean, we ambush them. I don't know if that's the -- but they probably didn't expect us, because what we did is pioneer a new strategy within the industry, because this has not been done before. I can reiterate that Regency is always, I would say, a pioneering company also. So we always come up with new strategies and employ new strategies to expand that just along the -- within the industry. So this was one of them. And what we might see, so we saw, in the initial stage, a significant growth in the LPG, but it's basically leveling off. So we're trying to maintain market share and grow as much as we can grow in response to the competition responding to what we have done.

Absolutely. There will always be that need to adjust to whatever is happening in the market. And as you entered the market, they had to adjust and know that they have adjusted, you need to readjust. We understand the dynamics of just business in general. So kudos to the RPL team for continuing to innovate and pioneer, and we're sure that we'll see more coming from you. So again, I feel like this is just a 3-part question. The question is the community is asking, are there any new strategic partnerships on the horizon?

Well, currently, no. We are open to new companies coming on board. We are open to other franchises similar to Whithorn. We can take many -- I mean, it can come in many ways, different ways. So currently, now what we have on the horizon is what I mentioned about being open and we're hopeful about a new service station approval on the South Coast. And yes, that's basically on the horizon, and we are in negotiations on the North Coast also.

Okay. Awesome. And as you mentioned that franchise station, that was indeed my second question. Why that location? It's no secret that it was branded with different marketing companies previously. So what is different about RPL? What will make it make sense for you?

RPL has policies in place that are quite different from, I would say, the traditional marketing companies, our competition. So we set -- we always get these questions. What makes it different from the other marketing companies? And I can't let out too much of our secrets really. As we can see, we are obviously different from the other marketing companies based on our growth and based on what we have seen, especially with our service station. And I mean, they basically gravitated towards Regency based on our policies that we have in place and our operations. They admired our policy, they admired our growth. And why we entertained them? I mean, the location, first of all, is an excellent location, it's on the main road, on our main turf here from Westmoreland to Montego Bay. We will be visible. Regency will be quite visible. So I mean, we will be out there, as a marketing strategy also. And yes, we have our policies in place, that our new franchise holder has met these policies and has agreed to these policies. So we are anxious to enter into this agreement, and we look forward to a fruitful relationship.

Okay. Thank you for that. Awesome. So we're looking forward to see the fruit of that. And I'm sure that by our next earnings call, you'll have...

Right, definitely.

All right. So Omar is asking if dividends are on the way?

Well, dividends are definitely on the way. Our policy has always been for us, when we are at that point, to pay dividends. So currently, because as we grow and we gain these profits, yes, we want to pay dividends, but there's always something new, as a growing company, coming on the table. And we want to keep our options open with regards to financing of these projects. So we will target a certain profit for a certain quarter. But during this time, we say, okay, from this profit, if we can, we'll be able to do some dividend payments. We discuss it amongst myself and the FC and the accounting team and the Board, because the Board is quite strict on our dividend policy. They encourage that, definitely encourage dividend payments. But always along the line, as a growing company, something comes on the table. We want to keep our options open. So yes, dividends, I would say, would be -- is underway. I don't want to state a particular time, but it's definitely a policy of ours.

Okay. All right. So we're going to continue with the questions. What is the size of the RPL team now? And how is that team expected to grow?

Well, prior to our IPO in 2022, our staff component was quite small. I can tell you that we have probably more than 5x or 6x the amount that we started. So we started with, I think, 15 employees. We are now, with the 3 service stations and what, we are 77 employees. No, 77, no. With all our locations, we are looking to increase that with Kingston very soon. And if we get those approvals for other service stations, we will gradually increase. And as usual, we employ from our communities.

Yes. And we would have seen where in your Q2 report, you would have highlighted some of the positions that are being employed right now and also those are available on your social media platforms, correct?

Right, correct. And on the website.

And the website, right? So for those who are listening and watching and may be interested in what those positions are, then please do go and check those out. So Dominic is asking, and I think, Jerry, this is your time to chime in. Dominic is saying, given the cash position of $19.27 million and the ongoing investments in new service stations, what measures are in place to ensure adequate liquidity for operational needs and future expansions?

Okay. Well, basically, for each expansion, for each project, we would have looked at the total cost and see how best we can find financing for that. So we have our financer that we basically would have discussion with to see each project, what the cost and how we are going to finance it either by bond, by getting a loan from the financial institution, whatever may that be. So that would have been a matter that we would have undertaken with our finance team and make a decision. And so each project is looked at separately.

And just to add to that. Remember, we are growing. So previous to this earnings call -- the previous earnings call, I said that we wanted to have these service stations operating, so we can actually see a real cash flow and retained earnings from these -- the profits from these 3 service stations in Kingston. So we won't be taking on any major capital expenditure for the next, I would say, 12 months. Right Jerry, we won't take on any major capital -- so we want to see what our profits are. So we want to have these service stations completed and experience these profits for at least 2 quarters. And then we will know how we move forward. So we are expanding, yes, but our expansion currently is not going to involve any huge capital expenditure for us to take out a bond or a loan to construct a service station per se. And we don't anticipate that for the next -- our target for the next 12 months. We can expand similar to what we did with our franchise agreement, which is a small minute capital expenditure that's primarily for rebranding. So yes, we can, in the next 12 months, open 3, 4, 5 more service stations Regency branded, and it doesn't take that capital outlay. So that's where our focus is on right now, which is why we say we are open to partner with Jamaican companies within the industry. And our policies are quite different. We don't have so much [indiscernible]. We want to grow together with our Jamaican companies. So we try to make it invited for you to come on board.

Understood. So before we jump into this next question, as you're speaking about funding, et cetera, there is that expected increase of the market cap on the junior market. I believe there was a question about it in the chat somewhere. And the question was really if there was an intent for RPL to take advantage of that increased junior market cap?

Well, definitely, if something comes on the table. As I said, we don't plan to do any huge capital expenditure currently. But if something that is very attractive comes on the table that requires it and we will as a company will benefit, definitely we will consider that.

Okay. Thank you for that. The next question from [ Humble Boss ] is what's the reason for the Negril cafes not being open as yet?

Well, I'll remind you that Negril location is a leased property. It is not owned by Regency Petroleum. So where Negril is located currently, we are still doing our due diligence in terms of profitability of this cafe being opened there. So we are still doing our diligence on that. Currently, we are quite profitable with our operations now, and it's going to be a part of the lease. I know we have a deposit on lease only, but we have to be prudent in what we decide to do. However, the proprietor -- there will be a cafe opened over there for sure.

Okay. All right. Thank you for that. Tran is asking, how confident are you about the bid for the gas station at the airport?

Well, we are quite confident, I can tell you, but it's a bit open to the general public who are our marketing companies, of which majority are participating, if not all. So we are going to put out our best foot and we are hopeful.

Understood. We do also understand that there's not much you can say about it. It's a bid and it [indiscernible] who are assessing the bid. Right?

Right.

The next question. Does franchising only apply to service stations? Or does it apply to LPG as well?

No, I'm happy for that question. I didn't touch on that at all. But definitely, it applies to LPG as well. Again, it requires a huge capital expenditure. So our policy with regards to franchise in the LPG, I can just tell you, we franchise JusGas for the bulk LPG, and that capital outlay for JusGas was no less than $30 million, no less than that. And it is a very conservative figure. So the capital outlay for our franchise agreement for the LPG with regards to household cylinders, so JusGas was bulk petroleum, which required trucks and storage equipment and so forth, approvals for storage. For the LPG, I'm assuming that you're asking about the household cylinders, 25 pounds and 30 pounds, that would require a minimum investment in the region of $12 million to $15 for the partnership with us. And that's primarily with regards to household cylinders investment, your stick. So you have to put a stick in household cylinders, and we will give you the support in terms of pricing -- I mean, otherwise, we can enter into an agreement. So yes, it's open, but because of the capital outlay, if you are already in the business and you want to become a part of the team, you can -- I mean, visit us and let us know, but we are definitely open to franchise the LPG. And there are many different variations of type of franchise that we can have different levels.

Thank you for that. Tran is asking what is the time line for the opening of the next gas station? I think there were a few persons asking that same question.

Well, as I stated, we are optimistic about September for the Kingston location.

Right. And I would just ask, for those who were asking about the time line for the gas station, to confirm that it is indeed the Kingston gas station that you're referencing, because there's no other time line for any other station.

Kingston gas station.

Right. Dominic is asking, how much of the increase in sales is directly attributable to the new service stations?

Well, off the top of my head, I don't know if Jerry can answer it more accurately, but we have been seeing increases from January -- well, we have been seeing significant increases since the last quarter of 2023. That was attributable to the opening of our Paradise location. So if you look at our financials, you will see our revenues marginally growing from the first quarter of last year, 2023, to the second quarter, to the third quarter, where there was some -- a little jump, and then to the fourth quarter, a significant jump in revenues, and that was primarily due to Paradise location opening. Now for the first quarter of 2024, you will see another significant jump, and that was attributable again to opening of our Negril location in the middle of January. So you'll have March and February and half of January included into those revenues. Second quarter that's completed in June, you would have Paradise location, Negril location, and the Savanna-la-Mar one being reflected in the second quarter. So you see that what would be the cause of that jump. So I give it to you in stages. So to answer your question about what percentage of -- let me ask you if you're asking about this last quarter. So of this last quarter, the new service stations would have been Paradise and Negril. I would say 75% to 80% of the increase will be attributable to the opening of these 2 service stations. That's with regards to the last quarter results of June. So of the last quarter revenues, 75% to 80% of those revenues will be made up of Paradise and Negril locations. Of that 75%, I would say 40% of that 75% -- 55% to 60% of that 75% will be from Negril. So in other words, the Negril location is doing extremely well.

Okay. Thank you for that breakdown. Jerry, was there anything you wanted to add to that or...

That's pretty comprehensive. That's...

Okay. I thought so as well. Sean is asking, what can we look forward to from RPL for the rest of this year and Q1 next year?

Well, the opening of Kingston location for sure for this year, and so for the fourth quarter of this year, we should see another significant jump in our revenues that we are targeting. And for the first quarter of next year, it should be another jump in our revenues just by having these service stations open. So I'm expecting a significant increase for the fourth quarter of this year when the Kingston location is open. So at the end of the fourth quarter, we should see another -- because we open a completely new service station in a new region, of which we anticipate huge volumes of sales to be based on our due diligence on that location.

Understood. Thank you for that. The next question, I believe this was from Philip. How much of the Q2 revenues are due to LPG, and what percent of profit is attributable to that part of the business?

Our Q2 revenues -- because the revenues are so high in Q2, the percentage of that would have been -- of the Q2 revenues would be in the region, say, 20%, 25%. However, it is still a significant growth because overall revenues have grown so much that 20% of that is still a huge growth in the revenue for the LPG from where it was before. So Jerry can go ahead.

Yes. Let me put in here. It used to be in that region, but because this gas station has opened now, the revenue as a percentage that is attributable to the LPG got much, much smaller based on the huge volume of sales with the opening of the gas stations, the percentage jumped up to like 78% there because of this volume of sales with the new stations.

Yes, right. So then the follow-up question to that then is what is the increase in LPG itself? Was there an increase quarter-over-quarter for Q2 in the LPG revenues? And what was that increase?

Yes. There was a slight increase, but it's nothing to speak of. Much of the increase here is due to the operation of the gas stations, volume of sales and so forth.

Okay, understood. Thank you for that. Philip is asking, are margins different across service stations? And if so, how?

Well, margins are definitely different across service stations and it's based on your location. I mean, it's a balancing act again. So whichever location you are, you have the competition around you. So we have to respond and also attract our customers. So we have to respond to the competition, attract our customers and be profitable at the same time. So it's a balancing act of many different factors. So you'll find that the margins will be different. And it's primarily based on locations for many reasons, locations for logistics in terms of transportation of our product to the location and also our competition, and how we can attract customers to our location. So there are many different factors involved in that.

Understood. Amar is stating first that the Kingston location is a very good location for a gas station because of the buses and taxis that frequent that road. So the question now is what are the strategies in place to ensure that RPL gets those customers?

Well, I can't go too much in the strategies that we have in place. However, we always try to stand out as a company when it comes down to customer service and competitiveness to draw our customers in. And our location, as you said, is an excellent location, so we just need to play our part and be Regency and do what Regency is good at.

That's right. And Robert is asking, does RPL plan to engage TransJamaica to build any service stations along the toll road?

Well, a service station, I can say, that we are proposing currently is actually on the toll road. So I don't think we need more than one.

Okay. Thank you for that. And I see another question from Sean. How many stations does RPL want to open by 2030?

2030 is 6 years from now. So in our time line, because, as I said, we currently are inviting companies that are within the industry to franchise with us. We have that invitation out, and we will see what happens over the next year to 2 years, the next 12 to 24 months. I mean, simultaneously, we are seeking -- we are always seeking locations across. We have certain strategic locations that we would look at first, I put priority on. And if these locations -- if there's an opportunity in these locations that we have in our planning, we identify particular locations that we would want to have Regency service stations. And if an opportunity arises where we're not able to franchise, but we have to construct. Because these locations are quite attractive, these regions or areas are quite attractive and would be attractive. So then we would seek to expand in these locations by our capital outlay. But by 2030, I would say, I mean, that's 6 years from now, we want to be a household name in Jamaica. We want to be in all the prime locations, prime areas, central areas in Jamaica. So we are currently at 4 service stations -- 5. So I'm thinking that we'll have one in each parish, at least one in each parish by 2030.

All right. That is noted. Thank you. Philip is noting that the Negril station being opened 24 hours started just before Dream WKND, and he's asking if that worked out well?

Yes. Well, it didn't -- it was new. A lot of persons wasn't aware of it. So the 24 hours -- it's still a work in progress, I would say. I mean, persons are still learning about it. It's not fully known or advertised, or it's not fully known amongst the community as yet. So we're still in that growth stage, especially for the night.

I can see to where that is a part of the balancing that you have spoken about earlier when we had touched on the Sunday closure and you're speaking about balancing the different factors. Being able to open a station 24 hours would help also, or I'm suspecting that it should help also with closing some of that gap, even though Sundays, you said, were not very high traffic days for RPL. So is that a part of the conversation that was held to decide on that 24-hour opening? And how long will you be assessing before you determine, yes, we're going to keep it 24 hours, or no, this is not working out?

Well, I would say, our [indiscernible] because we just discussed that in our management meeting earlier this week. And I would say, we have completed one fortnight already, and it's the first fortnight really, so I mean, as I said, people are still becoming aware of it. So we would do 2 to 3 more fortnights and see and assess from there, the 24 hour opening. I can tell you though that we have developed some loyalty amongst our customers, and they are becoming accepting of our Sunday closure. And what you find is that we will have a busy Saturday evening and a busy Monday morning. That's what we have noticed. We have seen a much busier Saturday evening and busier Monday morning. So I think they are planning around it, which is good, which is good.

Yes. That is good. That is adjustment. All right. I think we have a few more questions to go so far. Robert is asking, are these stations being built to be energy efficient with solar power?

Okay. No. Well, not the Kingston location as yet. We are still doing our evaluations on the solar. Currently, our power cost for the operation of the service station, believe it or not, for the gas station, is lower. It's not marginal, it's almost significantly lower than a service station with a convenience store. So the power cost to operate a service station, the gas station only, is not that significant. And when you talk about sustainability or effectiveness when it comes on to direct power from a power company, and say, for example, a standby generator, we find it quite consistent when it comes on to power source. Don't get me wrong, solar is a very good option. It's something that we need to consider for our own service stations moving forward, for sure. We definitely would implement that. The capital outlay again is there, but we are still doing evaluations on that. But yes, it's something that we are considering to have solar powered service stations. As I said, this is our experience so far. The power cost, electric cost -- if you look at our financials also, the power cost is not that significant of our cost for operation of our gas station only. It is quite more significant when it comes down to the convenience store with those refrigerators, ACs, whatever equipment being used there. So for sure, moving forward with our convenience stores, we will definitely consider solar power. Capital outlays are a bit higher, but yes, we will see it. But for the gas stations, it is not that overpowering, that overhead cost for the power for the service station. And that consistency that we have by the power company and a standby generator, because again, these locations are usually prime locations, where even if the power company is out, it's not usually for long. It's not residential areas, it's business communities. So you find that there are power outages not usually for long unless it's a disaster. And we feel quite well, I can tell you, after the hurricane. If we were solar power, we would have some challenges there post the hurricane if we were primary solar power, because that sunlight came only for 1 day, but that overcast situation and sunlight wouldn't be so consistent. We found that Hurricane Beryl passed after evening by -- well, not 7:00, by about 9:30, the following morning we were open. And there was no power in the community from the power company, but we have our standby generators in place. And we could open, I mean, for usual opening hours. What restraints we had were the staff. So we had to close early because of the staff, communities that they are from [indiscernible]. But from an operational point of view, that was proof to us of our system that we have when it comes to power and the cost of power.

All right. Thank you for that. And it's good to know that it is a part of the consideration as you go forward. So this is our final question that we're going to take on the call. I will say to the audience, if there are any other questions that you have, please post them in the comments section below the video, not in the live chat, post them in the comments, and we will pass those on to the RPL team for their response to you. So the final question that we have for you is, what are your thoughts on the stock price of the company? Is the stock undervalued?

Well, I can try to answer to the best of my knowledge. And in terms of the stock exchange, no. It's a market and where the stock exchange is, at what cycle, what fees, what stage we are at the stock exchange. Currently, stock market is down, and we are hoping that it will soon go back to where it was. Interest rates are quite high. So the investors have alternative methods of investment. So the stock market currently is down. It's market determined, market-driven. So in my opinion, I mean, when the stock market goes back to where it was, when it's back up, yes, the stock price should follow, but it's market determined. And Regency Petroleum as a growing company, I would say, this is the perfect opportunity now to take advantage of owning a part of Regency, because based on the growth projections that we have, I don't see where -- when the market returns to where it was and interest rates fall, it's going to be more costly to own a part of Regency than what it is now. So in terms of what the stock price is, I would say it's market driven. So it's all based on the stock market and what is happening on the stock market. So I don't have much to say on that. But what I can tell you is what we have planned and the growth plans for the company and how the market would react to that whenever the market comes back to where it was. I hope I answered your question.

Well, we'll ask the audience member if their question was answered, if they [indiscernible] from your response. But thank you so much, Andrew. Thank you, Jerry, for being here with us. As always, we do appreciate the opportunity to have these calls with you each quarter. And I know that the audience, based on their engagement and the questions in the chat, we can see that they also appreciate the opportunity to ask their questions and to share their comments with you in this way each quarter. So at this time, I want to hand over to you for your closing remarks to the audience. And again, I thank everyone for joining the call, and we hope to see you on the next one.

Thank you, Renate. Well, thanks again, Renate, and Learn Grow and Invest team for facilitating this process and to have a medium where we can communicate with our shareholders and just keep them abreast as to what is going on. Yes, you see the financials. Yes, you see Regency out there in the media and the news and you see what we have been doing. But it's good to know that we can communicate one-on-one with our shareholders or just the investors and public who have interest within the company. So we are happy that this platform is here for us to take advantage of and for us to communicate with our shareholders and the general public. Now Regency Petroleum, over the past 4 years of operation, we have been seeing significant growth. We have been experiencing currently what we have been targeting and what we have discussed and disclosed, and based on our projections that we have made in the past, we are now experiencing and we continue to experience this growth in revenue and profits. We expect in the future to be a household name, as I keep saying, and we look forward to continued growth within the industry. We look forward to continued gain of market share within the industry. And as you all know, we are in both sectors within -- we are in the automotive fuel, retail and bulk, that's wholesale, and we are in cooking gas, retail and bulk. We started out primarily as a cooking gas company, and we then diverted and aligned ourselves with the automotive fuel industry, retail. So for Regency Petroleum, we have a lot to look forward to. We are looking forward to continued growth across the island. We want to be across each and every main central location, our parishes, our centers within Jamaica. We want to be known as the household name for cooking gas. We want to be known also for automotive fuel. We want to continue pioneering different strategies and different models, different policies that we hope to continue putting in place for the betterment of the company, the country, the communities, both economically and socially. We want to see Jamaica grow economically and socially amongst our communities. We are entering the Corporate Area very soon, and we want to put our footprint there. We want to put our mark in the Corporate Area. We want the Corporate Area to experience what we have to offer and what the Western region has been experiencing so far. We plan to bring our product there, and we are anticipating our opening in the Corporate Area, another landmark another achievement for Regency. And we have other proposed locations being negotiated currently. So I would say to our shareholders, to the investing public in Jamaica and to our citizens watching, follow Regency Petroleum, we are on a growth path, on a growth trend. We have been growing. We want to grow our country, and we are inviting individuals, companies, businesses within the industry to come on board and grow with the company. We can enter various different conversations for growth. And we look forward to what the future has for us. And as always, we put our company and the future plans of our company to God first, and he will lead us through with our faith in him, and we have our confidence in him. All right. So thanks again for allowing us to share with you, and we're looking forward to the next earnings call where we can have more good news. Thanks again.