Friday, February 12, 2016

LASCO posts near half billion profit in Q3

LASCO Affiliated Companies saw their third-quarter combined net profit climb from $420 million in 2014 to $488.7 million during the three months ended December 31, 2015.

LASCO Manufacturing Limited

LASCO Manufacturing, which saw a 47 per cent increase in profit during the period under review, claimed the spot as the top achieving company for the three months endedDecember 31, 2015. It posted $232.3 million in net profit during the third quarter last year, up from $158.2 million during the comparative period in 2014. 

"In keeping with our announced development plans, this performance was against the background of significant expansion and the successful introduction of new products into the company's manufacturing process," noted Managing Director of LASCO Manufacturing, Mr. Robert Parkins.

LASCO Manufacturing's operating expenses more than doubled during the three months ended December 31, 2015, moving from $88 million in 2014 to $219.8 million during the review period. This was due to increases in staff complement, marketing expenses and product development costs associated with the 2015 JMA Breakthrough Product of the Year, LASCO iCool, as well as the recently launched, LASCO Ice Dream.

Even so, LASCO Manufacturing's revenue increased by 40 per cent for the same period,moving from $1.2 billion during the third quarter of 2014 to $1.7 billion in 2015. Cost of sales increased by 24 per cent from $960 million in the comparative quarter of 2014 to $1.2 billion in 2015 according to the financial statements signed by Parkins.

LASCO Grows Up

Melissa McHargh (2nd right), General Manager of EdgeChem presented the 2015 Charles Henderson-Davis Award to LASCO Manufacturing Ltd for Breakthrough Product of the Year. After only one year on the market, LASCO's iCool Water, Flavoured Waters and Juice Drinks have grown exponentially in the local beverage market. The award was received by the entire LASCO Team in attendance at the JMA's  47th Annual Awards Banquet on Saturday, October 10, 2015 at the Jamaica Pegasus.

Team Members; (L-R) Rhona Rhoden-Munoz, Purchasing Manger; Daniel Strachan, Production Manager, Powders; Carolyn Llewellyn, Sales Manager ; Robert Parkins, Managing Director, Lascelles Chin, Founder and Executive Chairman; Catherine Goodall, Marketing Manager, Beverages; Dr. Eileen Chin, Director and Andrew Reid, Operations Manager.
LASCO Financial Services

As for LASCO Financial Services, third quarter revenues increased by $39 million over the corresponding 2014 period.

Specifically, Trading Income increased by $31.5 million moving from $193 million in the three months ended December 31, 2014 to $224.5 million during the review quarter - as all business lines grew the contribution to revenues.

Remittance transactions and revenues continue to grow ahead of the industry and the Cambio and Loans divisions increased their transactions and revenues, following the expansion of the branch network, the company reported.

An increase in revenues from new business lines and value added services resulted in Other Operating Income more than doubling in the third quarter of 2015, moving from $6.9 million to $14.4 million. 

During the quarter, LASCO Financial Services made significant investments to diversify its business lines. In late September, it launched its first business loans branch and closed the quarter with three locations, two in Kingston and one in St. Catherine.

The company also launched its Telecoms Division with the distribution deal for Huawei Smartphones and wearable devices, rolling out eleven locations island-wide through its agent network.

Invariably, this investment impacted its expenses, which saw administrative costs increase by 60 per cent, moving from $51 million in the third quarter of 2014 to $82 million during the third quarter of 2015 - mainly due to a more than 50 per cent increase in staff complement and the aggressive marketing support to launch the telecoms business.

Total expenses for the quarter grew by 44 per cent over the corresponding quarter resulting in a $49.8 million profit from for the quarter.

Notwithstanding the contribution to the growth in revenues from the new investments, the transactions have not yet covered the associated start-up costs.

Net profit for the three months ended December 2015 decreased by 36 per cent, moving from $69 million in the comparative period in 2014 to $43.8 million during the three months under review.

"We anticipate that as the new businesses increase in transactions, the benefits will be realized in the upcoming periods," stated Ms. Jacinth Hall-Tracey, Managing Director of LASCO Financial Services.

LASCO Distributors Limited

Meanwhile, LASCO Distributors reported 10 per cent increase in net profit for the three months ended December 31, 2015 moving from $192.9 million in 2014 to $212.5 million during the review period.

Revenues increased by 36 per cent, up from $2.9 billion the third quarter of 2014, to $4.0 billion in the corresponding quarter of 2015. The improvements in revenue could be mostly attributed to business from new principals and new product introductions. 

Other operating income grew by 47 per cent, up from $35.9 million in the third quarter of 2014 to $52.7 million in the third quarter 2015. This was mostly due to performance based commission earned from Pharmaceutical Principals. Operating expenses moved from $378.6 million in 2014 to $458 million in the quarter under review, primarily as a result of new staff and marketing expenses to support the new product lines.

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