LASM reports 32% increase in nine months net profit

Date: February 7, 2018

Lasco Manufacturing Limited (LASM), for the nine months ended December 31, 2018 reported that total revenue increased by 6% from $5.28 billion in 2017 to $5.61 billion in 2018. Revenue increased $32.91 million or 2% to a total of $1.81 billion in the third quarter, relative to the $1.78 billion recorded for the comparable quarter in 2017.

Cost of sales amounted to $3.68 billion (2017: $3.61 billion) for the period, an increase of 2% year on year. LASM stated, “The margin improvement is primarily the result of improvements in operational efficiencies.” However, for the third quarter cost of sales was recorded at $1.20 billion in 2018 relative to $1.22 billion in 2017, a 1% decline.

As a result, gross profit of $1.93 billion was recorded for the period, 16% more than the $1.66 billion booked for the corresponding period in 2017. Gross profit for the third quarter increased by 9% to $611.24 million when compared to the $561.12 million booked for the quarter ended December 3, 2017.

LASM posted other income of $4.61 million relative to $14.76 million for the prior year.

Operating expenses increased 5% to close the period at $1.02 billion versus $970.31 million booked for the corresponding period last year. The company mentioned the capital investments were primarily focused on the continued build out of the new 65,000 square feet warehousing facility which was completed in the period. Expenses for the quarter also moved up by 23% to close at $368.31 million (2017: $300.61 million).

Consequently, LASM recorded operating profits of $919.19 million, 30% higher than the $707.85 million booked in 2017.

Finance costs for the period fell 9% to $90.03 million compared to $99.26 million in the prior year’s comparable period.

As such, profit before taxation amounted to $829.15 million, a increase of 36% from the $608.59 million recorded for the previous corresponding period. Taxes recorded for the period amounted to $128.64 million compared to $76.07 million incurred for the corresponding period in 2017. For the third quarter, profit before tax decreased $2.46 million or 1% to $225.65 million (2017:$223.19 million).

Net profit for the nine months totaled $700.51 million, a 32% uptick when compared to $532.52 million in 2017, while for the quarter totaled $197.44 million (2017: $195.29 million).

Consequently, earnings per share (EPS) for the period amounted to $0.17 relative to $0.13 in 2017. The EPS for the quarter amounted to $0.05 relative to $0.05 reported for 2017. The twelve months trailing EPS amounts to $0.18. The number of shares used in the calculations amounted to 4,087,130,170 units. LASM closed the trading period on February 6, 2018 at $3.39.

Balance sheet at a Glance:

Total assets increased 6% year on year, totaling $8.50 billion (2017: $8.05 billion) as at December 31, 2018. The increase in total assets over the period was mainly due to a $410.45 million increase in ‘Capital Work in Progress’ to a total of $926.64 million (2017: $516.19 million).

Total shareholder equity amounted to $5.47 billion as at December 31, 2017 (2017: $4.84 billion). Consequently, book value per share amounted to $1.34 relative to $1.18 in 2017.

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