Regency Petroleum Company Limited (RPL) Q2 FY2025 Earnings Call Transcript & Summary

Welcome to another earnings call for Regency Petroleum Company Limited, RPL, listed on the Jamaica Stock Exchange since December 2022. Since their listing, RPL has been consistent in joining us every quarter once their unaudited financials are out, for a deeper dive into the performance of the company for the previous quarter. So as we get into the context of Q2 2025 for RPL, I welcome you to join me in inviting Mr. Andrew Williams, CEO of RPL, to the platform once more. Welcome, Andrew.

Thank you, Rene, and thanks again to the LGI team for providing this opportunity for us to speak to our shareholders and the general public.

Always a pleasure. Over to you, sir.

Okay. And welcome again to our Q2 Earnings Call 2025 for Regency Petroleum Limited. We will start out with a word of prayer. Let us pray. Heavenly Father, we come to You once more at another earnings call. We give You thanks for life. We give You thanks for all that You have given to us, all blessings, all mercies upon us. We thank You for this company once more, Father, and we ask that You continue to use us, use the management team, use our directors, use our shareholders, oh Father. Help us to be a part of what You want us to do and do Your goodwill, oh Father. We ask that You continue to keep us safe, each and everyone of us. Bless us and keep us safe. [indiscernible]. Help us to continue to abide by Your will. And help this company also, Father, to continue to do what You wanted to do. In Jesus' name we pray. Amen. Welcome, again, once more, everyone. And we are excited about this Q2 earnings call and the performance of Q2. However, I will now hand over to our Executive Vice President, Ms. Amanda Williams. She will now go through our highlights, followed by our CFO, with the financial highlights. Welcome, Amanda.

Good morning, everyone, and thank you for joining us for Regency Petroleum's Q2 2025 Earnings Call for the quarter ended June 30, 2025. Before we begin, I want to take a moment to acknowledge the recent passing of our Human Resources Manager. She was a valued member of Regency Petroleum family, and her dedication and contributions will be remembered and deeply missed. On behalf of the company, I extend our sincere condolences to her family, friends and colleagues. This quarter, we navigated a challenging operating environment while continuing to deliver solid results. We've achieved significant growth in profitability, and we also maintained a strong balance sheet position. So now are we going through the highlights. So for Q2 2025, operating revenue totaled $430.3 million compared to $481.9 million in Q2 2024, a decrease of 11%. However, the gross profit increased sharply by 49%, moving from $61.5 million last year to $91.7 million this quarter. Profit before finance costs rose by 60% to $45.9 million, up from $28.7 million in the prior year. Profit after taxation stood at $36 million and representing a 36% increase from last year's $26.5 million. Earnings per share grew from $0.018 to $0.025, 39% improvement. So at this time, I'd like to introduce our Chief Financial Officer, Mr. Jerry Grant, who will walk us through the financials. Thank you.

A good morning to the [indiscernible] invest team and to our valid shareholders and other listeners. Again, let's [indiscernible] more deeply into the financials. During the period, April to June 2025, Regency Petroleum achieved $430.35 million in sales. This is an 11% reduction compared to the comparative 2024 quarter. Reduction, as was mentioned before, is due mainly to the reduction in the petroleum prices generally between the 2 periods. Our volume was up by 39%, and that for [indiscernible] was up by 39% compared to the 2024 quarter. So the main reduction that we are seeing in the dollar value is due mainly from the price [indiscernible]. Our gross profit was up 39%, and this was a great achievement as we try to cut the end price or keep our cost of sales intact, very tight, and to increase our margin traffic before our finance cost was up 60% as we try to contain our admin and general expense costs. This is an ongoing effort by the team. We were able to post a profit of $45 million compared to the $28 million in the prior period. Profit after tax was up 36%, which bring it to $36 million. And our comprehensive income profit before the [indiscernible] is reflecting a $35 million as we account for exchange loss due to our revaluation undergoing. Our earnings per share saw a strong increase of $0.018 to $0.025, so nice increase there. We are looking at the graphical representation of the finance material just highlighted for those who prefer this format. Okay. I mean I'm going to look at our balance sheet, which is very strong. Our cash has increased by 45%. This moving from $19 million in the prior period to $27 million, $28 million. Our [indiscernible] equipment as fixed asset segment has also increased due to the investment in our various gas stations. And [indiscernible] move from $431 million in the '24 period to $490 million, or receive a business well -- our receivables has gone down 14% as we start. [indiscernible] not related to the deposit and lease. And we have started offset in the lease, again, our receivables, I mean I believe for the [indiscernible] gas station and now it's a forwarding Spanish Town gas station. So there is a reduction in our 2 receivables. We try to keep our trade receivables under control, and during the quarter, I know there was a reduction compared to even the first quarter of 2024. So we try to be very tight with our trade receivables. Our current portion of [indiscernible], you see that [indiscernible] went 100% as we now reclassify the long-term, the bond that was a 2-year bond and it's not because due to be on 30th of September, which is just a little of a month away. So it's not our current liability for the company. Our accounts payable has increased by 53%, and this is due mainly to the fact that we have one more gas station in operation. So the various peers would have increased due to that operation -- additional operation fuel costs, everything has to be peer [indiscernible]. Credit terms that we're working with. So it does increase 53% over the period, more activity showing there. And that's the graphical representation of the balance sheet in terms of the movement. We will now look at some highlight from our cash flow statements, and it is sure in the cash flow from operation, a whopping 150% increase. During the 2024 quarter, it was showing a negative $36 million. For this quarter, it's now a positive $21 million, and that's showing the growth, the company is on the right path. Cash [indiscernible] activity, negative -- 1,121% negative. That is due merely to the IFRS 16 we account for the lease -- the finance lease, and I will refer that also to cash provided by financing activity, 560,000%. The IFRS standard, how we account [indiscernible] affect how it's reflected in the cash flow -- in the statement of cash flow. So the significant increase is really the standard has been in effect, and it's account for those lease and lease liability and lease assets. Okay, the graphical representation of the cash flow highlights. I will now pass over to our CEO, Andrew Williams.

Thank you for that, for the financial highlights, Jerry, for outlining our financial position as it stands currently. So with regards to our company's outlook. Well, we basically have been operating 3 service stations now for 2 quarters, and we are seeing the results from that. And we intend moving forward in the short term for the rest of this year, to continue the operations so we can basically see what our revenues and profits will be like. I'm very pleased to highlight and to experience this high profitability, which I can [indiscernible] saying that, this has been our highest profit quarter ever, which goes in line with what we have been speaking about, what we have been working towards as the company and the management team. So we are quite pleased with what we are experiencing currently this last quarter. I know this the quarter prior to this first quarter, we had some noncash expenses, other expenses that Chief Financial Officer has explained. But for this particular quarter ending June 30, this quarter has been the highest profit-making quarter for the company. And I cannot go without mentioning that or highlighting that. Now moving forward, we currently announced that we have the Kingston service station that we were successful on in the bidding process, and we are still in final signing agreements and final sign-offs on that. So no construction has been going on as of yet, but that's still in progress. The Crawford offered first bus stop -- is a lot of firsts for the company. It has been a lot of first for a period of time. I hope we continue to look towards at our first times in the benefit of the company and something that benefits the company. So the first truck stop that we announced last quarter also, I'm happy to now announce that construction has begun, and it's well underway. So it's in full force. So construction has begun under truck stop in Crawford, St. Elizabeth. This will be a dealer-on-dealer-operated service station. And we are pleased with what the contractor is doing and the progress thus far. I don't want to name [indiscernible] as yet based on what was in the past. We don't want to mention the date as to the completion. But so far, construction is on and it's full speed ahead. So we are eagerly anticipating that completion. So as part of our expansion process. Also, we are always ready to make our decision, our prudent decisions on any opportunities that might come on our table. I always say that. So what is targeted currently is to continue for the rest of this year to operate the service station, continue with the construction process of the Crawford and continue with the processes for the Kingston service station and have to -- and just expedite whatever needs to be expedited, so we can move straight ahead into the construction processes for Kingston and have Crawford completed. Again, if anything comes on our team, opportunity for the company or for our shareholders to benefit from, we will definitely do our due diligence on these projects. And as we have done in the past, and ensure that these projects will be feasible and should be successful or will be successful. We have a number of projects now that's on the table. Nothing I can mention of, currently. I am positive that I'll be able to make mention of it in the next quarter or earnings call. Based on where we are now, with the negotiations where we are, we are planning. So I'm not, at this moment, privy to make any comments on that. But I can tell you that we have some projects on the table now that we are looking at, and I'm positive that I'll be able to make mention of at least one of these projects in our next earnings call, our prior [indiscernible] earnings call and we can further [indiscernible] on the earnings call. So right now, to reiterate, we are pleased with this last quarter. We are pleased to be experiencing what we planned for. And again, we have to give God thanks because we always include Him in whatever decision-making processes we do, whatever planning stages we are, whatever management meetings we may have. Our management team, we have to put God first in front to make sure that we make the decisions that He will want us to make. And I'm sure that whatever decision He will want us to make will be in benefit of the company and to our shareholders. So in closing on our outlook. Again, would like to say, with God in the forefront, I'm positive that there's a bright future ahead for the company as we have been experiencing thus far. I think we can move into our question-and-answer now. [Technical Difficulty] We seem to be having a little bit of technical difficulties.

Okay. Thank you so much for that, Andrew. My apologies to everyone. My Internet decided to take a break. So apologies.

We are on to the Q&A segment. And we do have a few questions in the chat. But before we get to that, I do want to say congratulations again to the RPL team. It is a big deal that you have made your -- are indeed putting the things in place to make to make or to keep the company profitable and variable as you continue to grow. So congratulations to the team, to the Board. It bodes well for you as you move forward. All right. So let's go to the questions that are in the chat, and I will add my -- any others that are missed here as I go along. All right? So the first question comes from the LGI community. Do you have a clear plan to manage expenses as you continue to add more stations to your portfolio?

Well, yes, we -- managing our expenses is an ongoing thing for the management team. This is something that we evaluate, I would say, dearly -- I'm not over [indiscernible] when I say dearly. My CFO [indiscernible] that we have calls from time to time and say, what can we do to manage our expenses. What is your major expenses? I mean, like how do we implement more technology or what can we do to be more efficient. And at the same time, efficiency would lead to our administrative costs, our expenses being controlled and being fully optimal. So we just want to ensure that we are running efficiently, and we are preparing our assets which we need -- this is a nature of our company, where we always trying to prepare ourselves for the future in terms of we are preparing ourselves with different principles and policies within the company to take on normal -- our ventures to call. So we are trying to prepare and empower ourselves with whatever strategies we need to put in place. So although we have 3 or 4 services or whatever it is now, under LPG, we are expecting continuous growth across the [indiscernible] want to be a household name. So we try to [indiscernible] ourselves and target, I mean, make targets, ARPU targets in place that when we achieve this, what our expenses will be like a whole [indiscernible] team can operate. What products, what principles, what strategy we can put in place to ensure that we will be efficient when we have 10, 15, 20, 25, whatever amount of service station and if we do go overseas and become a multinational, what we have that core foundation in place. So managing our expenses. And we have seen the results from that because if you look on previous quarters, you will see our expenses have been changing. France, in some instances, it might go because we have expanded. But if you look at other areas that we try to curb and control and be more efficient and cut cost on uncertain issues, uncertain items, that mix of our balance sheet, our financial.

All right. That is good to hear, and I'm sure the shareholders can appreciate that. And also I appreciate that there will be times that you have to spend more before you start seeing the savings or before you start seeing the results. For instance, you mentioned putting the processes and plans in place so that you can expand with a framework. Creating that framework, getting our processes in place, getting your people in place, that's going to have an upfront cost that you will recognize -- you will have to realize that cost in some -- at some point. So thank you for that context. The next question is what do you forecast profits will be for the remainder of the year? I think Jerry can...

Let me add about -- what -- we expect a continuous increase over time. As we -- for the rest of this year, we will just operate unless something comes on table, separate opportunity that comes by and we need to act immediately, and it will be beneficial to the company. And our forecast thus far of what we have in place is to continue to operate and to do, implement and continue what we are doing currently to develop loyalty amounts of our customers and to be -- I mean, we'd be able to increase our profits based on -- I don't want to delve too much in the strategy that we implement, but continue to do what we're doing so that we can increase our profits with the current operation that we are doing. No, we are not. So yes, our targets show that we should increase profit quarter-over-quarter as we move forward. And our target. I don't know if I'm saying too much. Our CFO shaking his head, but we have our target. I want to see if we can at least meet that $100 million profit mark for this year. That's our target. That's how we [indiscernible] $100 million profit margin for this year.

It's always good to have our target. You know what you're working to.

Right, right, right. Let me just -- until Rene comes back, just basically state that the company has been performing based on what we have expected our expectation so far. We have been putting in the work, and we expect to grow significantly because what we started as a small company [indiscernible] for this year, yes, we are expecting to see increase in profits. And we're putting strategies and plans in place to see significant increases in profits over the medium to long term. So we're under a growth path and when it comes to that, we will be successful or continue to be successful in that increase in profits. We're quite pleased. The management team, excited. Everybody is quite pleased with that the performance so far. Rene is still...

What I want to say also is that as much as we are targeting and expecting profit of each quarter, of course, I would also like to be very realistic. I know that there will be times when you can now fluctuate -- fluctuation quarters and that is normal part of this business. And there is no cycle that is constantly up and going up, not in this world. So there, we have to talk our expectation -- reality of what is happening globally. And as the management team, we tried our best, we ensure that the company [indiscernible] are protected and well guided and we manage it prudently. But at the same time, we have to be realistic that we are living every world. So they're going to be times when a quarter going to be off. But at the same time, we're going to try our best to ensure that we make a promise to make it as profitable as possible.

Well done. Thank you for that, Jerry. So the next question is about the projects, right? Do you have a project manager on the RPL team? Now Andrew, you had mentioned in your outlook section that there are a number of projects on the table. And as a project manager myself, of course, I go into that more than I think about all that it takes to manage the number of projects that you guys have on the table and to do so well. So do you have someone who is central and helping you to manage those various projects day-to-day?

Again, going back to managing our costs, right? We do not see it necessary to employ or have a project manager per se in place until a project is being executed. No, the only project that is currently being executed is the Crawford project, which is a dealer-owned and dealer-operated. So our management team in-house is able to keep a track of that since it's been constructed. The capital expenditure is being taken on by the dealer that's operating the service station. So we -- Regency Petroleum, is not currently executing any projects, no. Whenever we are executing our projects, yes, we will see it necessary to have a project manager on site. What we don't -- we are, again, managing our expenses, we don't want to employ unnecessary staffing or personnel if it's not needed. Our management team is quite competent to administer what is taking place...

And we do have operations manager.

Right. So we have operations manager who will go and report. So -- and this is [indiscernible]. Now for projects that are on the table, we would not, at this point in time, need a project manager as yet. It will be, again, the management team, myself, which is very intimate. So I'm usually very intimate in the negotiations -- negotiation stage and planning stage. So right now, headed by me and the management team, we will look at the projects that we have on the table and do our due diligence on them, do evaluations or projections with our CFO and just the CFO, feasible these projects are and how profitable they will be or should be and we try to, as you can see, my CFO is quite realistic. So he keeps me in line when it comes on to my over optimism. So when we are applying our projections, he is the one who actually [indiscernible] said, no, well, was realistic. I'm trying to see the worst case scenario, which -- I mean I always also request the worst case scenario in our evaluation. So I know I'm going on quite a bit. But the projects on the table, we are in the negotiations phase now, and it takes some time for us to basically [indiscernible] it properly. So it can be beneficial and feasible for company and profitable. Everyone -- for everyone to benefit, the shareholders [indiscernible].

Of course. All right. The next question is what is the plan? We should expect this one right? What is the plan to repay the debt that is now current?

Jerry, you want it? Another one [indiscernible] you want to do it.

All right, yes, the plan is that we are seeking a commercial bank to our [indiscernible] bank loan. So the bank -- commercial bank we take will pay off the [indiscernible] and we will serve this -- that debt as a number will be [indiscernible] portion of principal [indiscernible] to what interest be down. So we are in a negotiation. Process has started, and we are -- going through that process. So come September 30, hopefully everything will be on track, we have [indiscernible] the bond and the service that [indiscernible].

Understood. All right. I hope that's an adequate answer for the one -- for your shareholder.

I can expound a bit. All right. I'm going to bring it back a few years ago when we just got listed, and it's probably a year into our listing on the stock exchange. Just as I mentioned earlier, you will have times when opportunities will come on our table and we will need to act on it immediately. Now being a recently listed confidence exchange at the time. This opportunity is actually a key reminder, this one is with regards to the Kingston service that was open January this year, should have been opened a year prior to January this year to [indiscernible] this year, which we had planned for so we could earn from the service station -- this service station in particular to service the bond. However. So we had to immediately -- we saw -- we did operations with all due diligence and saw how feasible this project would have been on Spanish Town road. So we acted immediately, considering that we had our competitors in line, also negotiating on this particular project. So we had to find our way to navigate through and act on this opportunity immediately, considerig where there's a recent listed company, a company that wanted what that needs to grow. We are looking towards growing across the island. So we saw this as a great opportunity for us, which now has proven to be -- was a prudent decision because based on what we are seeing, based on the results that we are seeing the results of that. Just in the second quarter, just after operating 6 months, we can see that impact on our financials. So we are even more convinced to know that decision at that time to jump and immediately take advantage of the opportunity that was on the table. And we took -- it was -- at the time, it was a U.S. dollar bond that was readily available. So I know most of you in business are of course, individuals would know that going to bank for a loan, regardless of what [indiscernible] you are, takes some time for our regular commercial loan to be approved. Now at the time, the best opportunity on the table for us to execute immediately was a bond that was offered to us, which we negotiated terms that extremely, in my opinion, it was excellent terms considering the bond and the time line, and we negotiated a bond. We executed and we now are benefiting from that decision. So we are [indiscernible] in place, in the construction process and the comments that what we are overcome that, we are now operating, which is where I go back to what I said earlier, that we want to operate this year. We have seen the best quarter ever in profitability, and that is mid of the Kingston service station operations also contributing significantly to that along with our other service station. So each station contributes on what we are doing, LPG is contributing, and we are seeing the benefits of what we are putting in place. So right now, being in the growth stage, we have the time where we can go ahead, instead of paying down or paying a significant amount to other bank. It is our decision now to see a long-term commercial loan, which we have gotten -- we went to our bank. We have gotten proposals from 3 to 4. CFO can correct me, 3 to 4 institutions, commercial banks that we have met with an [indiscernible] because I have looked at and we have decided, our [indiscernible] are deciding on what avenue to take, which is in the best interest of the company and best interest of our shareholders. So we are quite confident with where we are now and quite -- I can say we are more comfortable with what we have decided to do. It will allow the company's cash flow to be more significant, more [indiscernible]. And we'll be able now to continue our expansion process. Taking this and we were [indiscernible] on principal and interest as impact. So I'm quite comfortable with all this is [indiscernible]. I couldn't be more comfortable with [indiscernible] made up to this point and the results that we are seeing from these results.

Sure, we're more than answered the question. Thank you for that. And I got back right in time. I had to -- all right. So we're going right into the next question. How is the LPG business performing?

Okay. The LPG is performing as expected also. We have done some investment recently over the last 4 or 5 months in our LPG household cylinders, and we are seeing it's also contributed to the increase in profits that you are seeing. Because remember now, having an increase among -- CFO can correct me, having such an increase are the highest profit quarter ever, we -- it is so significant for the company because this year, especially we have come up -- we have to account for -- I think you can correct me, some noncash expenses. So operating at past 2 or 1 to 2 years, we wouldn't have these noncash expenses on our financials on our profit [indiscernible]. We have to take into account these noncash expenses starting this year, and which is what has hit our first quarter also. So we -- it hit our first quarter. It is also accounted for in the second quarter, but the profitability was so significant that we could account for this noncash expenses, account for other expenses, and still experience a high -- the highest profit quarter ever. And it's not only the gas station in Kingston are the LPG gas station, but also not to really emphasize on the LPG, which is total around -- LPG has also contributed significantly to the -- well, it has contributed more than usual towards the financials this last quarter based on what we have been investing organically. So we're not -- if you noticed, Regency Petroleum, to this date, doesn't really have that big loan portfolio per se. The loan portfolio we carry to date would be for the bond for our services, which is -- which we are clearly seeing. We are operating thus far based on our profitability, where P&O expenses based on our profitability. We are operating and making profits, not taking loans yet unless needed, unless we see it fit to take loans or whatever to increase -- to increase our investment. So the LPG business now, we are seeing results from it from the investment on the wholesale side where, as stated earlier this year, that we will be investing on our household cylinders -- a household [indiscernible] cylinders. And we are expanding across. You will -- we are exploring currently in the corporate era. For the household cylinders, you will soon see our cylinders in the corporate era, primarily over [ 100 ] [indiscernible] cylinders. And this is a result of our investment that we have been doing since the beginning of this year. And you will see some of the results so far from the financials are looking to see increased results in the next coming quarter.

Okay. Thank you for that. So I know in terms of LPG, it was, at one point, the larger or the much larger percentage of your revenues of your income. But now that you have service stations, naturally, the numbers for service stations would be much larger than the ones for the LPG. But it's still an important and significant part of the business. So we don't ever want to lose sight of that as well. I do want to go back a little bit to the question about the funding. [ Sean Maurice ] has -- our interest rates than the bond based on current rates, are there any plans after to either do an equity raise or another bond raise?

I cannot comment too much on that as yet considering that we have some projects now on the table. If we're going to do equity raise or bond raise, again, we have to [indiscernible] on the projects that we have on the tables. Based on where I sit now and what we are looking at, we have [ one ] number produce on the table. So after we have decided what we're going to execute on, then we can decide how we are going to finance that or those projects. So it's a little bit too early right now to decide because we have to make some further decisions on what we are going to execute on, and then we can package everything together and decide how we are going to raise once and for all equity raises.

Understood. What is your current staff count?

Our current count is 77. 77 members of staff. That includes [indiscernible] all members are staff.

All right. Thank you for that. What is your current dividend policy? And when is the likely time line for your first dividend payment?

Jerry, I don't know. We had a discussion recently now [indiscernible] about this dividend policy. [indiscernible] that.

Yes. Okay. I [indiscernible] a discussion on it in the last board meeting. And the policy basically is in place, but I don't basically have a copy here right now and we're still tweaking and [indiscernible] so it will be made public in short.

And I can tell you, yes, we are anticipating that dividend payment. We are anticipating [indiscernible] dividend payment. We have passed all the plans that we have on the table now. A part of it is geared towards -- indirectly in some [indiscernible], is geared towards our dividend policy and payment -- payments that we would want to have in place. So yes, it is a priority for us, dividend policy and payment. So as I said, we have wanted to operate within the 2 quarters with everything settled. This is the first quarter, I would say, as I said to my CFO, the first quarter will be scaling operated without any major projects that we are doing out that expenditure from the company. So let us see what happens over the next quarter and the quarter before the end of the year, and we see where we are. But it's still under -- it's our top priority definitely.

All right. That is good to hear. I do recall at the AGM, there was a question around the dividend policy as well and reference was made to prospectus about the policies being developed. So it's good to hear that the Board is indeed discussing that, and that team has that as a priority matter. The next question is which quarter is usually your best quarter?

Well, that is a difficult question to answer really because it's a company in the growth stage. You'll find that when we anticipate the quarter should be our best quarter, we have projects going on, we have other things going on that would affect our bottom line. As over the last 3 years, we have been having projects; Paradise, [indiscernible], Kingston. We saw -- or it's a little bit -- and this is from me. I don't know if Jerry has something to say that. That is a bit -- there's no trend as yet, really. We really say, well, our second quarter is -- should be our best quarter are the fourth quarter, Christmas season or this quarter. We have not reached that stage where we can single all that trend to say -- my opinion based on what I'm seeing here to determine quarter per se, to say that quarter is usually of this quarter. What I'm expecting now is increases quarter-over-quarter. And then I would say probably in a few more quarters, we can determine, say, our second quarter is our best quarter. But right now, it's balance in [indiscernible]. We also set our management team almost every day, whether remotely, online or in person to this cause. Trends that we have been seeing amongst our stations and to see what we can do to make everything more efficient or maintain efficiency a bit more optimizing our operation.

All right. Thank you for that. Sean is asking what is the current interest rate on the outgoing bond? And what does the interest rate look like for the bank loans being offered?

Jerry can answer that one.

[indiscernible] and it's a U.S. bond. We are looking at Jamaican-denominated loan, and it's -- I think it's very attractive. It's [indiscernible] and it's -- well, that's fixed at 3 years and it's getting lower after that 3 years. It's a downward push after 3 years. It seems a very, very attractive too. And that's after [indiscernible] options, that seem to be the best, most attractive one.

And the good thing about this loan payment is that we will be a principal and interest as opposed to with the [indiscernible] interest alone. So personally, I'm inclined to push for the commercial loan, you pin on your principle as well.

All right. Thank you for that insight. Jerome is asking what has better net profit margins, the cooking gas or petroleum?

Well, the cooking gas for sure would carry a higher margin. For sure. higher margins, higher capital expenditure, higher risk. So with higher capital expenditure, higher risk, results in higher margins. That's a formula.

All right. All right. Thank you. Next question is what impact will refinancing have on your finance costs and in turn, your profits?

Well, as you have some upfront costs against [indiscernible] upfront cost on your finance cost for once every quarter, maybe third quarter. And but over time, the company will be in a better position in terms of that we will not reappear in our net debt that we have. And it's been over multiple years. So we're spreading the cost over multiple years and interest rate is very attractive. So over time, that monthly cash will see less significant over time as inflation and materials get higher. In fact [indiscernible] I'll show you [indiscernible] behalf, the month impairment is not fixed, but is going to reduce as time goes by.

All right. Thank you so much for that. Jerome says he thinks the question on everyone's mind is, will we be able to park at the station at the airport while we we wait to [indiscernible] families.

Well, that's we -- we're not able to answer that question as yet. But I can tell you, it will -- it will have the facility here. I don't know.

I think that is just [indiscernible].

I think so.

Besides lower fuel pricing.

Yes, there was a reduction in the [indiscernible] during the period.

Okay, and that was a reduction in the cost for the trucking because there were less -- there was less transportation? Or is there just that time?

Remember, some of my location was closed. And as I said, it is primarily a sentiment of location. So it has less storage facility. So you'll find that would have to do more haulage to maintain the operation there, which is close to some time so that haulage expense would have been reduced.

Understood. Understood. And the last question I'm seeing for now is from Jerome. If cooking gas has higher margins, why haven't we heard recently a targeted push to grow that line?

Well -- I'm happy for that question. The LPG, the cooking gas is very, very, very risky business. You are -- and very capital intensive. So I cannot say it's enough that you will be investing the cost to construct a service station. And if you were to divert that expenditure into LPG cooking gas, first of all, that expenditure would merely be adequate to suffice one parish, first of all, regardless of the parish. And so that capital expenditure for the cylinders and now, you are talking about our risky product in turn that will keep our parish with our competitors, and you have the cost -- I mean, the chances of losing these cylinders. You are not selling these cylinders for the consumers. You have neared a charge and [indiscernible], which is not -- doesn't even make up 20% at a cost. If you're going to have -- if you're going to market a product in a particular location, so you have to have to absorb some of these costs. You cannot sell -- I mean, we're pleased -- get back your cost from the consumer for these cylinders. You only can charge a user fee. And you find that if you don't have a proper control system in place, which is the main challenge or the main obstacle in the LPG business is to control the cylinders. When you send them out in various households, it's very difficult for you to control these. However, we have strategies in place, which is why we haven't say gone or to do a equity raise or a bond or loan to invest heavily in cooking gas as yet because we need to develop these strategies, which we have been trying and proven, and we have some successful wins so far, wherein we can maintain a certain level of control. I'm not going to say we're going to maintain 2 to our controllers. So in our evaluations and calculations, we have to account for losses based on investment. So we need to open to the point where we can reduce the losses down to a minimal where we can absorb these losses in terms of losing the cylinders and the cost [indiscernible] involved. And still and at the bottom line being the profit margin still maintain a certain level, which we are very close by that now. We can then move forward, which is I said, we, I'm hoping by the end of this year, we can do a heavy investment in LPG. But we have to develop these strategies first and ensure that prove it, try it on with what we currently have, which is why we organically grow the LPG business. We allow the profit that is being earned from the LPG not to reinvest back into the LPG. It is not used by anything else. All profits from LPG is put back into the LPG for it to grow organically. And when we -- we have seen the results from how and when we employ the strategy we are put in place, and we have a relationship with our customers. We deliver confidence, you know that. Yes, we are ready to invest heavily because we have these strategies in place. We have this network in place, and we can now control our losses, and control how we move forward to be profitable. We don't want to go home and not be confident that what we are doing on the investment that we are putting in. We will read the rollout. So I would say it's a work in progress, and that's why we decided to grow it organically. So yes, our intention is to become a household name, not only -- we're not a household name. It's not really geared towards gas stations, and it's really geared towards LPG. So let me clarify that more. Wherever I mention -- a household name. I really mentioned [indiscernible] LPG to be a Jamaican-owned company that is a household name in Jamaica for our cooking gas. So it takes time. We have been listed about 3 -- going 3 years, I think, going 3 years now, 2.5 years, and I think we have made some similar accomplishments with regards to that. [indiscernible] carefully tread along with it.

Indeed, you have. So thank you for that, Andrew. That was very comprehensive, and I think your shareholders would appreciate that explanation. So my last question is really for Amanda. Amanda, this was your first time joining us. Can we expect to see more of you? And can you share with us what your role is and how it is that you are now playing a part in the company? What can we expect from Amanda?

So yes, the plan is for me to be included and to be even more often. And as per my role, I am the Executive Vice President of Regency Petroleum, and I do also work behind the scenes. And I'm currently working remotely. I currently go to university in the States. So yes, you'll definitely be hearing more from me. I'll be traveling pretty often for events as often as I can. And yes, that's basically it.

All right. Thank you so much. It is always great to see the succession planning in place and the expansion of the team. Oh, Daniel has follow-up question. Is the sub location currently fully operational?

No, not yet. It's still the [indiscernible] of what to place and the nature of the products or items that were involved -- sorry, primary tires and lubricants, engine oils. It's a very tedious thing to clean up and to dispose off. And we have to involve numerous agencies. And it's not [indiscernible]. I was talking about me being attached to it by our family business. It is still a bit hazardous to complete or to begin operations at a location until all cleanups are complete. And everything is -- I mean, back to some normalcy.

All right. Okay. Thank you so much to the Regency team, as always. Thank you to the audience shareholders participants. Thank you for the questions and just the interaction. It has been an insightful meeting. I will ask you, Andrew, if you have any closing remarks, anything that you'd like to share with your audience before we go.

Okay. Well, as always, I would like to thank our shareholders for the confidence they have placed in the company. I realize that Regency Petroleum is an investor demanded company based on our stock and its [indiscernible] that has made over time. And I would like to share that we intend for our company to grow to its fullest. We want a Jamaican company, and this is my dream, my one dream to have a Jamaican company becoming a multinational and be recognized globally in the petroleum industry. And we are on a way there. I can mention that we were recognized from financial times as one of the fastest-growing companies for 2025 globally. And we take much pride in that. And I mean, we are overwhelmed with that award. And this is also encouraging for us, for the company. And it should be encouraging for our shareholders also. We try to be very transparent in all our operations. When we have a bad quarter, we have a good quarter, whichever quarter is we see necessary to communicate at all times with our investors because you are a part of the company also. So -- and it's a Jamaican-owned company that is for Jamaicans to be a part. We want to expand and grow together. So it is -- we always see necessary for us to engage you in a conversation like where you can ask your questions and have them answered hopefully adequately for you, which I always answer to the fullest. And we put God first because I don't have to say anything more. We can see the results of the company from inception till now, and it's clearly on our growth path. It's clearly been successful, and we continue to put God in the forefront and have all faith in Him that He will direct us along the right path. So until we meet again, on our next earnings call, I hope to have more good news to share with our shareholders and the general audience. Thank you.