FULL-SERVICE hardware company Lumber Depot Limited recorded a 42 per cent increase in profit despite setbacks associated with COVID-19.
Revenues of $1.16 million for the nine-month period ended January 31, 2022, reflected a 10 per cent increase over the $1.05 million reported in the same period last year. Third-quarter revenues also rose by 11 per cent to $400 million.
“Lumber Depot Limited had a solid nine-month performance,” chairman Jeffrey Hall informed shareholders.
However, he pointed out that for the three months the company's revenues and profits “were affected by limits on commercial and construction activity during the spike in COVID-19 cases arising from the Omicron variant as well as challenges to the supply of certain construction inputs”.
To clarify, Hall told the Jamaica Observer that the hardware, like other businesses, faced logistics challenges associated with delays in the global supply chain and the increased prices of raw material. He also noted that with company's customer base comprising “contractors that work on small and medium-sized residential and commercial developments”, the absence of workers on construction sites due to illness would have slowed demand for raw materials.
Still, Lumber Depot “will seek to maintain volume by maintaining stock availability while emphasing service levels”, the chairman said. On that note, the company's inventory for the nine months rose by 18 per cent when compared to the same period a year earlier.
At the same time, the company kept administrative and other expenses relative stable, remaining around $119 million. For the third quarter, expenses fell $2.11 million less than $46.26 recorded in 2020. Lumber Depot also benefited from reversals in losses on trade receivables, pointing to improved collections.
At $142.94 million, net profit for the nine months ended January 31, 2022, is 42 per cent more compared with a year ago.
“Our market position is bolstered by our reputation for excellent service and for delivering good customer value. The financial performance during the quarter and the year-to-date benefited from management initiatives to lead the market in securing adequate stock levels for all key hardware items while limiting price increases wherever practical. We also worked hard to maintain commercially reasonable opening hours and staffing levels throughout the most challenging periods of COVID-+19,” Hall told shareholders.
Going forward, the chairman anticipates price increases and logistics challenges will continue to impact Lumber Depot's operation, but said the company will leverage its “strong market position in the communities we directly serve”.