Sunday 23 September, 2018

Strong sales push LASCO Manufacturing Q1 profit to $237 million

“The positive out-turn for the quarter reflects growth in volumes, improved operational efficiencies, streamlining and cost controls” stated Managing Director, James Rawle.

“The positive out-turn for the quarter reflects growth in volumes, improved operational efficiencies, streamlining and cost controls” stated Managing Director, James Rawle.

LASCO Manufacturing Limited (LASM) saw its net profit jump by 77 per cent during the first quarter of this year, fuelled by strong sales and cost control. 

For the three months ended June 2018, 2018, net profit amounted to $237 million, a significant increase over the $134 million recorded in comparative period of 2017.

“The positive out-turn for the quarter reflects growth in volumes, improved operational efficiencies, streamlining and cost controls” stated Managing Director, James Rawle.

In the months leading up to the review quarter, LASM entered the carbonated and energy drinks market, introduced a reduced sugar variant of its flagship product LASCO Vanilla Food Drink and reduced the sugar content of some products in the iCool juice drink range.

Related Article

“The reception to our LASCO Food Drink low sugar variant has been positive. New flavours are expected in September,” said Rawle.

Concurrently, the carbonated beverage Lyrix, and energy drink Konka have seen solid sales since launching earlier his year, with export currently being done through LASCO Distributors Limited.

“Sales are as expected, even as volumes continue to grow in a competitive market,” Rawle went on to say.

LASM reported total revenue for the three months ended June 30, 2018 at $1.7 billion, up from $1.5 billion during the comparative period last year.

Gross profit margin for the period was 35 per cent up from 32 per cent over the same period of the prior year.

“The margin improvement is attributable to volume growth, sales mix and improved operational efficiencies,” LASM said.

The outlook remains positive to deliver improvements in sustainable profit growth, the company added.

Among the initiatives to further improve efficiencies, is a new 65,000 square feet warehousing facility, to be completed this September. This will result in important cost savings and improved logistics for the company.

As for cost control during the three months ended June 30, 2018, administrative expenses stood at $308 million, the same level as in the previous year, resulting in an improved expense to sale ratio of 18 per cent compared to 20 per cent in the same quarter of the prior year.

Nonetheless, LASM continued to invest heavily in marketing programmes and brand building activities throughout the period, with special attention to recently launched new products.

Total assets at the end of June stood at $8.3 billion, an increase of 12 per cent over the same period last year. Trade and other receivables were $2.1 billion or 30 per cent over the prior year, while trade payables were $937 million, an increase of 10 per cent when compared to the same period over the prior year.

The principal activities of LASM are the manufacturing of soy-based products, juice, drinks, water and the export of various LASCO branded products.

The company has three production lines in its liquid plant, producing the LASCO iCool range of water and juice drinks, LASCO iDrade a hydration drink, a carbonated beverage Lyrix and the energy drink Konka. The dry division features the complete range of LASCO Food Drinks, LASCO Lasoy, LASCO Enriched Milk Powder, LASCO Oats Porridge Mixes and LASCO Nutrify a high protein meal replacement.