Date: July 29, 2020
Lasco Manufacturing Limited (LASM) for the three months ended June 30, 2020 recorded an increase of 3% in total revenue to total $1.85 billion, relative to the $1.79 billion recorded for the comparable period in 2019.
Cost of sales amounted to $1.13 billion (2019: $1.12 billion) for the quarter, a marginal increase of 1% year on year. As a result, gross profit of $720.16 million was recorded for the period, 8% more than the $667.89 million booked for the quarter June 30, 2019. LASM noted that, “the increase in the gross margin is primarily attributable to on-going improvement in manufacturing efficiencies.”
LASM posted other loss of $2.32 million versus other income of $17.12 million reported for the prior corresponding quarter.
Operating expenses decreased 6% to close the period at $310.94 million versus $330.19 million booked for the corresponding period last year. Management mentioned that, “the positive out-turn for the quarter reflects gains from on-going improvements in operational efficiencies, reduction in structural costs and continued streamlining of the operations.”
Consequently, LASM recorded operating profits of $406.90 million, 15% higher than the $354.82 million booked in 2019.
Finance costs for the first quarter decreased 49% to $16.26 million compared to $32.06 million in the prior year’s comparable period.
As such, profit before taxation amounted to $390.64 million, an increase of 21% from the $322.76 million recorded for the previous year. Taxes recorded for the period amounted to $48.83 million compared to $40.35 million incurred for the corresponding period in 2019. As such, Net Profit for the first quarter totaled $341.81 million compared to $282.42 million in 2019, an increase of 21%.
Consequently, earnings per share for the quarter ended June 30, 2020, amounted to $0.08 relative to $0.07 in 2019. The twelve months trailing EPS amounts to $0.25. The number of shares used in the calculations amounted to 4,130,913,151 units. The stock price closed trading on July 28, 2020 at $3.58.
LASM stated that, “capital investments for the period were $38 million with the main focus during the period being the completion of the powder plant expansion. The rate of capital investments was deliberately restricted as a result of the pandemic and the strategy to conserve cash.”
Balance sheet at a Glance:
Total assets increased 11% year on year, totaling $9.70 billion as at June 30, 2020 (2019: $8.77 billion). The increase in total assets over the period was mainly due to a $231.55 million or 23% increase in ‘Cash and Bank Balances’ to total of $1.23 billion (2019: $995.12 million) and a 26% increase in ‘Trade and Other Receivables’ to $2 billion (2019: $1.59 billion). This movement was however tempered by the 3% reduction in ‘Property, Plant & Equipment’ to total $4.57 billion (2019: $4.73 billion).
Total shareholders’ equity amounted to $7.09 billion as at June 30, 2020 (2019: $5.89 billion). Consequently, book value per share amounted to $1.72 relative to $1.42 in 2019.
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.
