LASD reports 40% decline in year end net profits

Date: May 31, 2019

Lasco Distributors Limited (LASD) posted 11% growth in revenue to $18.13 billion, up from $16.27 billion in the corresponding period in 2018. For the quarter, revenue increased by 19% closing at $4.80 billion (2018: $4.03 billion).

Cost of sales amounted to $14.58 billion, up 11% on the $13.10 billion reported in the prior comparable period. Within the fourth quarter, cost of sales went up 19% to $3.88 billion versus $3.25 billion in the previous quarter in 2018.

Consequently, gross profit recorded an increase of 12% year over year, closing at $3.55 billion compared to the $3.17 billion generated for the same period in the prior year. However, gross profit for the quarter climbed 18% totalling $922.61 million (2018: $779.28 million).

Other operating income fell by 66% to end the year end at $136.01 million relative to $395.41 million in the corresponding period last year. For the quarter, other operating loss closed at $37.31 million versus other operating income of $326 million in the same quarter last year.

Operating expenses of $2.98 billion were booked for the year end, a growth of 20% on $2.49 billion recorded for the comparable period of 2018. Of this:

Administrative cost went up 15% to close at $2.20 billion (2018: $1.92 billion).

Selling and promotional cost closed at $775.77 million (2018: $568.17 million).

Management noted that, “the increase in operating expenses was due to increased security and depreciation charges associated with the newly built warehouse space as well as increased marketing support, particularly in the liquid beverage category to support continued drive to increase market share. We have also bolstered our sale steam and fleet to expand our reach to smaller shops, bars and groceries.”

Operating profit fell by 35% to close at $705.86 million for the period under review. For the quarter, there was a decline to $37.47 million relative to $493.77 million recorded in the prior comparable quarter in 2018.

Finance cost totalled $13.92 million (2018: $524,000), while for the quarter, finance costs closed at $13.44 million (2018: $170,000).

Pre-tax profit amounted to $691.94 million, a 36% decrease from the $1.08 billion reported in the previous year. For the quarter, Pre-tax profit saw a decline to $24.02 million (2018: $493.60 million).

Net profit for the period closed at $597.78 million (2018: $1 billion), a 40% decline year over year following taxation of $94.16 million (2018: $75.49 million). As for the quarter, net loss amounted to $23.07 versus net profit of $468.66 million reported in the previous corresponding quarter.

LASD mentioned that, “the decline in net profit was heavily impacted by the one-off Pfizer payment ($273M) received in the last financial year.”

Earnings per share for the year ended March 2019, totalled $0.17 versus $0.29 for the corresponding period in 2018. For the quarter, loss per share amounted to $0.01 (2018: $0.13). The total amount of shares outstanding used for this calculation was 3,507,259,835 units. Notably, LASD’s closed the trading period on May 30, 2019, at $3.70.

Balance sheet at a glance:

As at March 31, 2019, ‘Total Assets’ amounted to $8.64 billion, 2% more than last year’s $8.51 billion. This increase was due to an increase in ‘short-term deposits’ and ‘property, plant and equipment’ which closed at $196.82 million (2018: $118.69 million) and $1.83 billion (2018: $1.48 billion). However, the increase was tempered by the reduction in ‘cash and cash equivalent’ which amounted to $1.31 billion (2018: $1.72 billion).

Shareholders’ equity amounted to $5.19 billion as at March 2019 (2018: $4.57 billion), reflecting a 14% increase. This translated in a book value per share of $1.48 (2018: $1.30).


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