LASD reports 16% growth in nine months net profit

Date: February 07, 2019

Lasco Distributors Limited (LASD), for the nine months ended December 31, 2018,  posted 9% growth in revenue to $13.33 billion, up from $12.24 billion in the corresponding period in 2017. For the quarter, revenue increased by 17% closing at $4.55 billion (2017: $3.89 billion).

Cost of sales amounted to $10.70 billion, up 9% on the $9.85 billion reported in the prior comparable period. Within the third quarter, cost of sales went up by 18% to $3.70 billion versus $3.14 billion in the previous quarter in 2017.

Consequently, gross profit recorded an increase of 10% year over year, closing at $2.63 billion compared to the $2.39 billion generated for the same period in the prior year. However, gross profit for the quarter climbed 13% totalling $850.59 million (2017: $749.48 million).

Other operating income jumped grossly by 150% to end the nine months period at $173.32 million relative to $69.41 million in the corresponding period last year. For the quarter, other operating income increased by 39% to $69.39 million (2017: $49.84 million).

Operating expenses of $2.13 billion were booked for the nine months, a growth of 14% on $1.88 billion recorded for the comparable period of 2017. Operating expenses went up by 14% for the third quarter amounting to $754.07 million (2017: $662.40 million). The Company indicated that, “this was primarily due to start-up marketing cost for newly launched brands, as well as increases in insurance and depreciation expenses relating to the warehouse expansion and other capital investments for increased operational capacity.”

Operating profit improved by 14% to close at $668.39 million for the period under review. For the quarter, there was a 21% growth posted closing at $165.91 million relative to $136.92 million in the prior comparable quarter in 2017.

Finance cost increased by 34% totalling $474,000 for the period compared to $354,000 in the year prior.

Pre-tax profit amounted to $667.92 million, an increase of 14% from the $585.77 million in the previous year. Pre-tax profit saw a 21% increase in the third quarter closing at $165.75 million (2017: $136.82 million).

Net profit for the period closed at $620.85 million (2017: $535.22 million), a 16% climb year over year following taxation of $47.07 million (2017: $50.55 million). As for the third quarter, net profit increased by 24% to $157.13 million (2017: $126.72 million).

Earnings per share for the nine months ended December 31, 2018 totalled $0.18 versus $0.15 for the corresponding period in 2017. For the quarter, earnings per share amounted to $0.04 (2017: $0.04). The trailing twelve months EPS is $0.31. The total amount of shares outstanding used for this calculation was 3,497,615,571 units. Notably, LASD’s closed the trading period on February 06, 2019, at $3.82.

Balance sheet at a glance:

As at December 31, 2018, ‘Total Assets’ amounted to $8.61 billion, 6% more than last year’s $8.10 billion. ‘Total Non-Current Assets’ totalled $1.92 billion (2017: $1.59 billion), a 21% increase over the corresponding period last year. LASD noted that, “this increase resulted from investment in equipment and warehouse infrastructure.” Notably, ‘Property, Plant and Equipment’ closed at $1.79 billion, rising 24% over the previous year. ‘Cash and Cash Equivalents’ and ‘Short-term Investments’ also contributed to this increase in assets with a 25% and 67% growth to close at $1.10 billion (2017: $878.73 million) and $197.86 million (2017: $118.51 million), respectively. Management stated that, “To date, the company has repaid a total of $507 million of the loan borrowed for the warehouse expansion which has a current balance of $193 million.”

Shareholders equity amounted to $5.21 billion as at December 31, 2018 (2017: $4.49 billion), reflecting an increase of 16%. This translated in book value per share of $1.49 (2017: $1.28).

 

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.

 

2019-02-07T14:46:12+00:00