The passage of Hurricane Beryl and a one-week global outage from MoneyGram International Inc were significant enough to send Lasco Financial Services Limited (LASF) from a $37.19-million net profit to a $8.64-million net loss for its second quarter (July to September).

The remittance player published its second-quarter report on Friday, noting that the passage of Hurricane Beryl disrupted its ability to service customers on the south coast of Jamaica which had endured damaged roads and reduced electricity access. However, the company was able to navigate the difficult period and gave commendation to its sub-agents who served those parishes.

“Just as we were recovering from the impact of the hurricane, we were further impacted by the events which led to MoneyGram International proactively taking their systems offline to contain and remediate unauthorised activity. There was a full shutdown of transactions for five days which significantly impacted our earnings from remittance, cambio and card services. Since the restoration of services, transactions have progressively improved but not normalised,” said Jacinth Hall-Tracey, Lasco Financial’s managing director, in the quarterly report.

Remittance makes up 43 per cent of Lasco Financial’s revenue, which totalled $2.20 billion as of the March 2024 financial year (FY). Another 34 per cent of the company’s revenues originate from its cambio business with 14 per cent from its microcredit subsidiary.

These disruptions from the hurricane and MoneyGram were responsible for the five per cent dip in revenue to $546.28 million. Despite a limited increase in administrative expenses, Lasco Financials’ selling and promotion expenses increased six per cent to $204.71 million as it spent more to promote the recently launched MoneyGram Direct to Card service. The combination of these events resulted in a 61 per cent drop in operating profit from $71.01 million to $27.16 million. The slight uptick in finance cost of $20.76 million and relatively unchanged tax expense of $15.05 million were responsible for the loss in the quarter.

The Bank of Jamaica’s provisional data for August show that remittance inflows increased by 3.6 per cent to US$299.60 million which is an improvement to July where there was a 4.7 per cent dip in the month’s inflows from US$302.80 million to US$288.70 million. Remittance inflows from January to August were down 0.64 per cent to US$1.94 billion.

For the overall six months, Lasco Financial’s revenue was down six per cent to $1.08 billion with operating profit down 43 per cent to $79.50 million. Even with lower finance costs and tax expenses, the net profit was down 84 per cent from $56 million to $9.15 million.

Total assets were down seven per cent to $4.15 billion with the company’s loans and other receivables balance at $1.53 billion while its cash balances were $1.08 billion, with net cash of $845.81 million after accounting for a bank overdraft. Total liabilities were down 14 per cent to $1.87 billion as the company reduced its payables and bank overdraft while shareholders equity closed the period at $2.28 billion.

As Lasco seeks to turn the ship, it closed its underperforming Montego Bay branch which should result in improvements to the company’s earnings in the subsequent months. This is being done in tandem with cost-cutting measures and growth stimulating services.

Lasco closed Tuesday at $1.76 which leaves the stock down eight per cent with a market capitalisation of $2.25 billion. Mayberry Jamaican Equities has purchased an additional 2,466,864 shares since March to increase their holdings to 267,179,109 shares with a 20.8697 per cent stake. Mayberry Managed Clients account sold 174,539 shares to reduce its interest to 8,957,963 shares while JN Fund Managers Limited for JN Pooled Pension Local Equity Fund became the sixth-largest shareholder with 12,286,087 shares. Human Resources Manager Nordel Leach-Murphy now owns 1,171,112 shares after not owning shares at the start of the new financial year.