LASM reports 21% increase in three months net profit

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.

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