Lasco Manufacturing profit up 45% in second quarter
Published:Thursday | October 27, 2016 | 12:00 AMSteven Jackson
Lasco Manufacturing Limited posted a 45 per cent rise in net profit at $363 million for its second-quarter boosted by continued robust sales from its iCool beverage production line.
It resulted in earning per share hitting nine cents during the quarter compared with six cents a year earlier. Revenue rose to $2.2 billion for the September second-quarter or one-third higher than the $1.65 billion earned a year ago.
"Production at the liquid plant continues to grow steadily, and we will further increase our capacity to meet the overwhelming market demand for our iCool line of beverages, by ramping up production with the installation of additional equipment by the end of the financial year," said Managing Director Robert Parkins in a statement accompanying the financials.
"We continue to be optimistic and confident about the future for this product line with substantial profits to be realised," he said.
New products to be introduced
Over six months, the company made net profit of $587 million on revenues of $3.9 billion. This equated to earnings per share of 14 cents compared to 12 cents a year earlier.
Parkins also hinted that new products will be introduced by the end of the year in order to continue realising "significant sales and profits". The new dry plant at White Marl is now fully operational and, together with the existing Red Hills Road Dry Plant, recorded an increase of 24 per cent in profits over last year, added Parkins.
The company's balance sheet shows the value of fixed assets - property, plant and equipment - moving from $3.5 billion at the beginning of the financial year to $4.6 billion at the close of the second-quarter. This is due to approximately $1 billion of assets associated with both the liquid and dry plants being transferred during the period from work in progress as a result of continuing commissioning of these operations, Parkins said.
In early October, at the annual general meeting, Lasco Manufacturers announced plans for another round of investment totalling US$10 million ($1.3 billion) for the ensuing financial year as the company ramps up exports. The company will spend US$5 million on expanding its building adding an additional 62,000 square feet then another US$5 million on the equipment to in order to triple capacity, according to chairman Lascelles Chin in his address to shareholders at the meeting.
With the increased investment, the company expects to double profits in two to three years. Lasco Manufacturing earned $826 million in net profit on $6.5 billion in revenues for its year end March 2016, or 34 per cent higher net profit year on year. The upgrade will allow for new products lines and increased output of iCool.
Sister company Lasco Distributors Limited now exports iCool to six countries in the region, with plans to enter Trinidad & Tobago, and Panama. The company plans to utilise the Massy Group to distribute its drink in T&T, while offering other products to other distributors. Lasco will also re-enter Haiti - which performed well on sales but poorly on receivables - but will only sell dry products in that market as liquid products attract a prohibitive 40 per cent duty.
Lasco asserted to shareholders that it is the number one company in its class in the Jamaican market and number two in Barbados as well as Guyana.