LASM Earnings up 24.7% For 9 Months Ending December 2023

  • Aided by robust revenue growth and a reduction in finance costs, LASM reported $568.30Mn in net profit attributed to shareholders for Q3 2023 representing an increase of 16.6% in profitability compared to Q3 2022.
  • Revenues for the quarter increased by 10.94% to $3.22Bn driven by an increase in business activity.
  • Cost of sales grew in line with the higher sales. Cost of sales grew by 13.95% (Q3) year on year, in response to input cost increases, due mainly to increased maintenance and labour costs. As a result of cost expanding at a faster pace than revenues, the gross profit margin fell slightly in the quarter to 37.0% from 37.8% in 2022.
  • Operating Expenses were up 19.1% year over year to $420.01Mn for the quarter which may have been influenced by inflationary increases in variable expenses associated with increased revenues as well as escalating costs due to global supply chain challenges arising from delays in the Panama and Suez Canals.
  • LASM continues to prioritise organic profitable growth and incremental margin improvements. Its value creation strategy includes investments in its brands, innovation, and technology, and continued improvements in operational efficiencies. Further, with the negative impacts of current geo-political conflicts and climate related impacts on transit via the Panama Canal, LASM has committed to continue taking appropriate measures to minimise disruptions to its operations.
  • With the third quarter outturn, earnings for the nine months to December amounted to $1.71Bn, an increase of 24.7% over the same period in 2022.
  • LASM’s stock price has increased by 5.6% since the start of the calendar year. The stock closed Thursday’s trading session at $4.90 and trades at a P/E of 8.54x, below the Junior Market Manufacturing Sector Average of 26.17x.

(Sources: JSE & NCBCM Research)