Lasco Manufacturing Limited (LASM) for the three month ended June 30, 2017 recorded a decrease of $379.89 million or 13% in total revenue to total $1.51billion, relative to the $1.73 billion recorded for the comparable period in 2016.according to LASM, “revenue was impacted by the phasing down of production during periods of the first two months of the quarter to allow for plant upgrading (towards greater efficiency and improved quality).” Management also indicated the market was adequately supplied during this period as, “stock for distribution were built up and sold”.
Cost of sales amounted to $1.03 billion (2016: $1.16 billion) for the quarter, a decline of 11% year on year. As a result, gross profit of $478.22 million was recorded for the period, 16% less than the $569.08 million booked for the quarter June 30, 2017.
LASM posted other income of $13.76 million relative to a loss of $2.05 million for the prior year.
Operating expenses increased approximately 14% to close the period at $308.37 million versus $269.83 million booked for the corresponding period last year.
Consequently, LASM recorded operating profits of $183.61 million, 38% lower than the $297.19 million booked in 2016. LASM highlighted, “profit was impacted by additionally marketing and brand building investments to support the brands and distribution discounts to support sales.”
Finance costs for the year fell 27% to $30.08 million compared to $41.02 million in the prior year’s comparable period.
As such, profit before taxation amounted to $153.53 million, a decrease of 40% from the $256.17 million recorded for the previous year. Taxes recorded for the period amounted to $19.25 million compared to $32.08 million incurred for the corresponding period in 2016. As such Net Profit for the first quarter totaled $134.28 million compared to $224.09 million in 2016, a contraction of 40%.
Consequently, earnings per share for the quarter ended June 30, 2017 amounted to$0.03 relative to $0.05 in 2016. The twelve months trailing EPS amounts to $0.15. The number of shares used in the calculations amounted to 4,087,130,170 units.
LASM stated, “we continue to invest heavily in marketing programmes and brand building activities during the period; with these investments along with the expected volume development of the recently launched new products, we expect to see positive growth in revenue and profits during the next quarter and throughout the year.”
Balance sheet at a Glance:
Total assets increased 8% year on year, totaling $7.45 billion (2016: $6.87 billion) as at June 30, 2017. The increase in total assets over the period was mainly due to a $579.54 million or 19% increase in ‘Non-Current Assets” a total of $4.65 billion (2016: $3.92 billion).
Total shareholder equity amounted to $4.57 billion as at June 30, 2017 (2016: $3.96 billion). Consequently, book value per share amounted to $1.12 relative to $0.97 in 2016.
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