LASF reports first quarter net loss of $105.76 million

August 17, 2020

Lasco Financial Services (LASF), recorded for the three months ended June 30, 2020, a total of $533.01 million in Trading Income; this represents a decline of 9% relative to the $585.80 million recorded in the comparable quarter in 2019.  Other Income for the quarter amounted to $5.95 million, a decrease of 91% compared to $68.67 million in 2019. LASF noted, “As the Government of Jamaica navigated its response to the COVID – 19 pandemic, LFSL also implemented actions to assist its customer base and preserve cashflow while protecting its staff and assets. Although transactions in all business lines were impacted, the decline in revenue was largely due to reduced earnings from our customer base whose businesses were immediately impacted by the imposed restrictions.”

Consequently, this resulted in an overall revenues of $538.96 million for the quarter, a decline of 18% compared to $654.47 million in 2019.

Operating Expenses for the period amounted to $561.01 million which is 18% more than the $476.16 million recorded in June 2019. Of this, Selling and Promotional Expenses increased 29% to close at $297.36 million relative to $229.65 million in 2019, while Administrative Expenses rose 7% to close at $263.65 million (2019: $246.51 million).

As a result, loss from operations for the period closed at $22.05 million relative to a profit of $178.31 million that was recorded in the prior period in 2019.

Finance Cost amounted to $49.77 million for the quarter (2019: $48.56 million), increasing by 2%. This resulted in loss before taxation of $71.81 million, comparative to a profit of $129.75 million booked in 2019.

After taxation of $33.95 million (2019: $38.66 million), Net loss for the quarter amounted to $105.76 million versus a net profit of $91.09 million booked the prior period.

Loss per share for the quarter amounted $0.08 (2019: $0.07). The number of shares used in the calculation was 1,270,094,391. The twelve months trailing LPS is $0.20. The stock price as at August 14, 2020 closed at $2.32.

The company stated, “As we continue to make the necessary adjustments to our business to ensure we restore the key fundamentals which will allow us to maximize on our competitive advantages, we welcome Dr. Hopeton Morrison, our new General Manager for the subsidiary LASCO Microfinance. His wealth of knowledge and experience in the field of microfinance is critical to navigating these unprecedented times. Dr. Morrison took leadership of the company on August 3, 2020.”

Balance Sheet Highlights:

As at June 30, 2020 the company’s assets totaled $4.04 billion, $6.48 million more than its value of $4.03 billion a year ago. This increase in total assets was largely driven by increases in ‘Cash and cash equivalents’ and ‘Short term Deposit’ which closed at $652.42 million (2019: $124.81 million) and $289.22 million (2019: $83.29 million) respectively. However, ‘Receivables’ declined by 33% from $2.66 billion in 2019 to total $1.78 billion in 2020. LASF noted, “Although there is a general increase in assets, there was reduction in the Loans and receivables due to write offs and a reduction in the investment property due to its sale in the financial year just ended.”

Total Stockholders’ equity as at June 30, 2020 closed at $1.43 billion a decrease of 15% compared to the $1.68 billion reported in 2019. This resulted in a book value per share of $1.13 (2019: $1.33).


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