LASM reports 9% decline in year end net profits

Date: June 01, 2020

Lasco Manufacturing, for the year ended March 31, 2020, total revenue increased by 4% from $7.57 billion in 2019 to $7.89 billion in 2020. Revenue increased 5% for the fourth quarter to a total of $2.04 billion, relative to the $1.95 billion recorded for the comparable period in 2019.

Cost of sales amounted to $4.97 billion (2019: $4.89 billion) for the period, an increase of 2% year on year. For the quarter, cost of sales was recorded at $1.27 billion relative to $1.21 billion in 2019.  As a result, gross profit of $2.92 billion was recorded for the year ended March 31, 2020, 9% more than the $2.68 billion booked for the corresponding period in 2019. Gross profit for the quarter increased 4% to $778.04 million when compared to the $744.62 million booked for the similar quarter ended March 31, 2019. LASM noted that, “the gain in gross profit margin was fueled by mainly by gains in efficiency in the manufacturing operations.”

LASM posted other income of $30.02 million relative to $1.84 million for the prior year.

Operating expenses increased 16% to close the period at $1.66 billion versus $1.42 billion booked for the corresponding period last year.  Of this, administrative and other expenses climbed 20% to $1.36 billion (2019: $1.14 billion), while selling and promotion expenses rose 2% to $291.01 million (2019: $285.96 million). Management noted, “this increase was due to the inclusion of charges for stock options granted during the year under the Employee Stock Option Plan”. Expenses for the quarter also reflected an increase of 34% to close at $540.35 million (2019: $403.15 million).

Consequently, LASM for the year ended March 31, 2020, recorded operating profits of $1.29 billion, 3% higher than the $1.26 billion booked in 2019. While for the quarter, operating profit closed at $269.92 million (2019: $338.69 million).

Finance costs for the year ended March 31, 2020 fell 13% to $93.62 million compared to $107.43 million in the prior year.

As such, profit before taxation amounted to $1.20 billion, an increase of 4% from the $1.15 billion recorded for the previous corresponding period. Taxes recorded for the period amounted to $217.11 million compared to $73.67 million incurred for the corresponding period in 2019. Net profit for the year was $983.68 million, 9% lower than last year’s net profit of $1.08 billion. LASM booked $202.99 million in net profit for the fourth quarter, compared $376.27 million for the corresponding quarter in 2019.

As such Total Comprehensive Income for the year ended totalled $1.02 billion compared to $1.08 billion in 2019, a decrease of 5%.

Consequently, earnings per share (EPS) for the period amounted to $0.24 relative to $0.26 in 2019. The EPS for the quarter amounted to $0.05 relative to $0.09 reported for 2019. The number of shares used in the calculations amounted to 4,091,163,151 units. Notably, LASM’s stock price closed trading on May 29, 2020 at $4.50.

Notably, Management highlighted that, “capital investments amounted to $196M (2019: $588M), the main capital project being continued work on the expansion of powder manufacturing operations.”

Balance sheet at a Glance:

Total assets increased 11% year on year, totaling $9.74 billion (2019: $8.79 billion) as at March 31, 2020. The increase in total assets over the period was mainly due to a $723.93 million increase in ‘Cash and Cash Equivalents’ to a total of $1.35 billion (2019: $918.72 million). ‘Inventories’ and ‘Receivables’ also contributed to the increase amounting to $1.08 billion (2019: $899.89 million) and $2.04 billion (2019: $1.79 billion), respectively.

Total shareholders’ equity amounted to $6.75 billion as at March 31, 2020  (2019: $5.85 billion). Consequently, book value per share amounted to $1.64 relative to $1.42 in 2019.

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