October 30, 2019

Lasco Manufacturing Limited (LASM) for the six months ended September 30, 2019, recorded an increase of $50.30 million or 1% in revenue to total $3.85 billion relative to the $3.80 billion recorded for the comparable period in 2018. For the second quarter, total revenue closed at $2.06 billion (2018: $2.07 billion), a 0.2% decline.

Cost of sales amounted to $2.43 billion (2018: $2.47 billion) for the period, a decrease of 2% year on year. As a result, gross profit of $1.42 billion was recorded for the period, 7% more than the $1.32 billion booked in September 2018. For the quarter, gross profit grew by 5% to close at $754.22 million (2018: $716.08 million). The Company highlighted that the gross profit margin improvement is, “primarily the result of improvements in operational efficiencies.”

LASM posted other income of $13.91 million, compared to other losses of $4.47 million reported for the prior year. While for the quarter, other losses totaled $3.20 million versus losses of $7.44 million in the previous comparable quarter.

Operating expenses closed the period at $721.99 million compared to $651.86 million booked for the corresponding period last year. While, for the quarter, operating expenses rose by 14% amounting to $391.80 million (2018: $344.29 million).

Consequently, LASM recorded operating profits of $714.03 million, 7% higher than the $667.18 million booked in 2018. Operating profits fell 1% to close the second quarter at $359.21 million relative to $364.35 million in the prior comparable quarter.

Finance costs for the six months declined by 15% to $53.96 million compared to $63.68 million in the prior year’s comparable period. In the second quarter, finance costs also fell, declining by 33% to close the quarter at $21.91 million (2018: $32.46 million).

As such, profit before taxation amounted to $660.07 million, an increase of 9% from the $603.50 million recorded for the previous year. Taxes recorded for the period amounted to $97.51 million (2018: $100.44 million). Thus, net profit for the six months period totalled $562.56 million compared to $503.06 million in 2018, an increase of 12%. While, for the second quarter, net profit closed at $280.15 million (2018: $265.40 million), up by 6%.

Consequently, Earnings per share for the period ended September 30, 2019 amounted to $0.14 relative to $0.12 in 2018. For the quarter, Earnings per share totalled to $0.07 (2018: $0.06). The twelve months trailing EPS amounts to $0.28. The number of shares used in the calculations amounted to 4,105,263,151 units. The stock price closed trading on October 30, 2019 at $5.04.

LASM mentioned that, “Capital Investments were primarily focused on the continued build out of the expansion of our Dry Blend Plant at White Marl.”

Balance sheet at a Glance:

Total assets increased 3% year on year, totalling $8.94 billion as at September 30, 2019 (2018: $8.66 billion). The increase in total assets was mainly due to a $535.44 million or 13% increase in ‘Property, Plant & Equipment’ to total of $4.68 billion (2018: $4.14 million) and a 420% increase in ‘Cash and Bank balances’ to total $401.45 million (2018: $77.28 million).

Total shareholders’ equity amounted to $6.21 billion as at September 30, 2019 (2018: $5.27 billion). Consequently, book value per share amounted to $1.51 relative to $1.28 in 2018.

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