LASD reports 10% decline in nine months net profit

Date: February 07, 2020

Lasco Distributors Limited (LASD), for the nine months ended December 31, 2019,  posted 7% growth in revenue to $14.30 billion, up from $13.33 billion in the corresponding period in 2018. For the quarter, revenue increased by 8% closing at $4.90 billion (2018: $4.55 billion).

Cost of sales amounted to $11.48 billion, up 7% on the $10.70 billion reported in the prior comparable period. Within the third quarter, cost of sales went up by 7% to $3.97 billion versus $3.70 billion in the comparable quarter in 2018.

Consequently, gross profit recorded an increase of 7% year over year, closing at $2.82 billion compared to the $2.63 billion generated for the same period in the prior year. However, gross profit for the quarter increased 8% totalling $920.77 million (2018: $850.59 million).

Other operating income decreased by 59% to end the nine months period at $70.73 million relative to $173.32 million in the corresponding period last year. For the quarter, other operating income decreased by 63% to $25.42 million (2018: $69.39 million). According to Management, “this was due to a loss on disposal of fixed assets and commission received on principal account was lower than the prior period.”

Operating expenses of $2.26 billion was booked for the nine months, a growth of 6% on $2.13 billion recorded for the comparable period of 2018. Operating expenses went up by 0.2% for the third quarter amounting to $755.74 million (2018: $754.07 million).

Operating profit decreased by 6% to close at $630.27 million for the period under review. For the quarter, there was a 15% in operating profit to $190.45 million relative to $165.91 million in the prior comparable quarter in 2018.

Finance cost increased grossly by 2549% totalling $12.56 million for the period compared to $474,000 in the year prior. The Company noted, “Total loans owing at the end of the period was $113.3 million compared to $193.30 million in the previous year.”

Pre-tax profit amounted to $617.71 million, a decrease of 8% from the $667.92 million in the previous year. Pre-tax profit saw a 13% increase in the third quarter closing at $187.96 million (2018: $165.75 million).

Net profit for the period closed at $557.50 million (2018: $620.85 million), a 10% decrease year over year following taxation of $60.21 million (2018: $47.07 million). As for the third quarter, net profit increased by 9% to $171.92 million (2018: $157.13 million). The Company indicated that, “the nine months comparative decline in net profit was mainly attributable to the impact of foreign exchange losses, restructuring expenses and legal fees associated with ongoing matters including the Pfizer case where we anticipate a favourable outcome to our appeal.”

Earnings per share for the nine months ended December 31, 2019 totalled $0.16 versus $0.18 for the corresponding period in 2018. For the quarter, earnings per share amounted to $0.05 (2018: $0.04). The trailing twelve months EPS is $0.15. The total amount of shares outstanding used for this calculation was 3,507,591,626 units. Notably, LASD’s closed the trading period on February 06, 2020, at $3.02.

Balance sheet at a glance:

As at December 31, 2019, ‘Total Assets’ amounted to $9.49 billion, 10% more than last year’s $8.61 billion. ‘Total Non-Current Assets’ totalled $2.21 billion (2018: $1.92 billion), a 15% increase over the corresponding period last year. Total current assets amounted to $7.28 billion relative to $6.69 billion as at  December 31, 2018.

Shareholders equity amounted to $5.60 billion as at December 31, 2019 (2018: $5.21 billion), reflecting an increase of 8%. This translated in book value per share of $1.60 (2018: $1.48).


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.