November 13, 2023

LASCO Financial Services Limited (LASF) for the six months ended September 30, 2023, reported a 4% decrease in Trading Income totaling $1.08 billion compared to $1.12 billion in the corresponding period last year. LASF noted, “the reduction in income represents a reduction in transactions over the period and lower than anticipated Cambio gains”. Trading Income for the second quarter experienced an 8% decrease to close at $540.58 million compared to $584.57 million for the comparable quarter of 2022.

Other Income amounted to $71.07 million (2022: $63.32 million), this represents an increase of 12% year over year.

Admin & other expenses increased by 8% to close at $639.12 million (2022: $592.15 million), while Selling and promotional costs increased by 21% from $307.94 million in 2022 to $372.62 million in the period under review. As a result, operating expenses for the six months ended September 30, 2023, amounted to $1.01 billion, a 12% increase relative to $900.10 million reported in 2022.

Profit from Operations for the six months amounted to $139.09 million, a 52% decrease relative to $287.79 million reported in 2022. Profit from Operations for the second quarter amounted to $71.01 million (2022: $154.26 million). Finance Costs totalled $43.15 million, a 21% decrease from the corresponding period last year. (2022: $54.72 million).

Profit Before Taxation for the six months amounted to $95.94 million, a 59% decrease relative to $233.07 million reported in 2022. Profit Before Taxation for the second quarter amounted to $52.87 million (2022: $126.31 million).

Taxation for the six months reached $39.93 million (2022: $76.32 million). Net Profit for the six months amounted to $56.00 million, a 64% decrease from the $156.75 million reported in 2022. For the second quarter, Net Profit was $37.19 million (2022: $73.97 million), a result of the reduced revenues and increased investments in product support.

LASF highlighted, “These results reflect new costs which have been introduced in the current year. In view of the outcome, LFSL has taken certain steps to correct the slide in transactions”.

Consequently, Earnings Per Share for the six months amounted to $0.04 (2022: EPS: $0.12), while Earnings Per Share for the quarter totaled $0.03 (2022: EPS: $0.06). The twelve-month trailing EPS was $0.09, and the number of shares used in these calculations was 1,280,227,726.

Notably, LASF’s stock price closed the trading period on November 10, 2023, at a price of $1.96 with a corresponding P/E ratio of 22.16x.

Balance Sheet Highlights

The company’s assets totalled $4.09 billion (2022: $4.43 billion). “LFSL reduced its cash holdings during the last quarter, in order to pay down the long-term loan with JMMB Bank. We reduced the loan by $439 million or 42%. It is important for us to reduce the debt burden and the associated costs, given that we have the cashflows”, according to LASF.

Shareholder’s equity was $2.17 billion (2022: $2.12 billion), representing a book value per share of $1.69 (2022: $1.66).

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