Lasco Manufacturing earnings slip
Lasco Manufacturing's profit slipped by just under two per cent as it took on staff and interest costs related to the building of its new plant.
The company posted net profit of $153 million for the three months to September 30, compared to $155 million during the corresponding period last year.
"We would not classify this as a loss but as 'growth path investment'," according Eileen Chin, Lasco Manufacturing managing director. She told the Jamaica Observer that the expansion cost will be recovered as soon as the plant is operational early next year, and projected earnings are realised.
Still, increased local consumer demand and exports resulted in a 20 per cent increase in sales, from $795 million during the comparative three months last year to $958 million during the review period.
"We have made every effort to improve the consistent delivery of some raw materials and packaging material and raw materials as the reduction in this flow created a shortfall in our projected yield," said Lasco in its unaudited financial statements.
The reduction led to a lower than expected financial performance for the past quarter.
"Our financial performance will improve as we meet the demand for the next quarter based on the strategic decision to extend our range of suppliers which will increase our performance."
Lasco Manufacturing broke ground in January for a state-of-the-art factory on 25 acres of land in White Marl, St Catherine.
Lasco said it reached another stage of the completion of the new state of the art plant facility — "total capital spends at September was $1.36 billion and the loan drawn down is $350 million of the $1.4 billion which was approved".
The development is expected to create 250 jobs and feature a modern and highly efficient processing plant.
To ensure a smooth start-up production, Lasco said it recruited some of the best in the industry. "This came with a cost and was included in our operating expenses," it said.
"We have the objective of increasing productivity, efficiency and reducing importation needs. But more importantly, we have the objective of continuing to serve Jamaica and our beloved Jamaicans," said Chin at the groundbreaking ceremony.
In addition to modern and energy efficient machinery, she said the new facility will house a state-of-the-art laboratory.
The laboratory will allow its research and development team to access the technology necessary to strengthen the ability to create innovative products, Chin said.
"It will mean a streamlining of production that will translate to increased sales and profits, and will be a stepping-stone for the continued growth of our manufacturing company," said Lascelles Chin, Lasco's chairman.