STRONG sales growth at LASCO Distributors was not enough to lift profits in the third quarter, as higher operating and financing costs squeezed margins, while sister company LASCO Manufacturing faced production disruption linked to Hurricane Melissa.

The differing pressures left the two affiliated companies with contrasting results for the period.

LASCO Distributors reported an 8.1 per cent increase in revenue for the December quarter, supported by steady demand across its main product lines and continued market expansion. However, that top-line expansion was tempered by cost pressures that weighed on earnings. Managing Director John De Silva noted that operating expenses increased, reflecting higher staff-related costs, increased marketing and increased security costs, while financing expenses also climbed, contributing to the decline in profit.

Even so, he said its core business remains strong.

“The growth acceleration reported year-to-date confirms the effectiveness of the demand generating initiatives being implemented, supported by ongoing investment in sales and marketing. This, together with the completion of major infrastructure investments which will become operational in the final quarter, will enable the company to continue to perform well in the future,” De Silva said in the preamble to the company’s just-released quarterly results.

In recent periods, LASCO Distributors has been strengthening its growth platform through expanded distribution partnerships, deeper investment in marketing, and continued build-out of its logistics and warehouse infrastructure. The company has also been widening its pharmaceutical and health-care portfolio through new global partnerships while pushing further into export markets and diversifying its product mix.

Those efforts are now beginning to show in the numbers. De Silva said the diversification strategy, centred on exports and the pharmaceutical business, now accounts for roughly 20 per cent of total revenue and is delivering solid results, positioning the segment to make a stronger contribution to earnings growth in the periods ahead.

Meanwhile, at LASCO Manufacturing, the quarter unfolded under different circumstances.

Managing Director James Rawle said the company’s performance was negatively impacted by events surrounding Hurricane Melissa, which led to suspension of manufacturing operations for approximately one week, disrupting output and weighing on sales and margins for the period.

Accordingly, manufacturing revenue declined in the December quarter and gross margins softened, although the company still reported a modest improvement in net profit compared with the same period last year. Over the nine months, operating profit and earnings improved, even as revenue remained below the prior year level, reflecting a gradual stabilisation following earlier challenges.

Looking ahead, LASCO Distributors said its ongoing demand-building initiatives and investments in infrastructure should support performance, with exports and pharmaceutical products expected to play a bigger role in future growth.

LASCO Manufacturing also indicated that it remains focused on meeting its targets for the remainder of the year, expressing confidence that operations will continue to stabilise following the hurricane-related interruption.

“We will continue our strong focus on achieving our targets for the year and thereby deliver sustained value growth for all our stakeholders,” Rawle said.