Jacinth Hall-Tracey Managing Director for Lasco Financial Services Limited has released the following Three Months April – June 2023
Three Months Business Performance Highlights
574.4 million dollars in Income
Up 1.75 percent above the corresponding 2022 period
An increase of $9.8 million dollars
67.8 million dollars Profit from Operations
Down 49.2 percent below the corresponding 2022 period
A decrease of $65.7 million dollars
18.8 million dollars Net Profit for the period
Down 77.3 percent below the corresponding 2022 period
A decrease of $63.9 million dollars.
Our first Quarter was a turning point for the business as we implemented several organizational changes to drive more efficiencies. This resulted in the redundancies of some fifteen positions between both companies (LASCO Financial and LASCO Microfinance) as we make efforts to consolidate resources and maximize value. The expenses associated with these separations are reflected in this quarter.
Income
LASCO Financial Services Limited (LFSL) is reporting consolidated income of $574.4 million for the first quarter of the 2023-2024 Financial year. This represents an increase of $9.8 million on income of $564.5 million which was generated in the corresponding 2022-2023 first quarter. The 1.75% increase was related to growth in trading gains, new services and fees.
Expenses
Consolidated expenses for the Quarter was $506.5 million, which was $75.6 million more than the previous corresponding period. Contributing to this increase is the $15.7 million in Selling and Promotions to support new services, and $58.8 million increase in administrative costs to support the deployment of new services, increased costs of operation and redundancy packages. Based on the plans in place for the new financial year, these key actions were needed in the first quarter to ensure we strengthen our foundation for a competitive year ahead.
Profitability
Profit from operations closed the quarter at $67.8 million compared with $133.5 million in the 2022-23 corresponding period. Profit after tax declined significantly to close the quarter at $18.8 million. Several foundational activities were embarked upon in the first quarter significantly increasing expenses, including increased advertising to drive awareness of our key services with the expectation of growth in the next three quarters and the reduction in permanent staff positions arising from reorganization to drive efficiencies and control future costs. With lowered fixed costs, we anticipate stronger results for the rest of year.
Total assets reduced year over year by $509 million or 11.8% to close the period at $3,819.5 million. The key contributor to this decline is the reduction in our cash
holdings. LFSL has strong cash generating capacity which we leveraged to pay down our long-term loan with JMMB Bank by $439 million or 42%. This was a significant move for us to strengthen our financial position. Our balance on long term debt now stands at $621.9 million to JMMB Bank and $138.8 million to the Development Bank of Jamaica. The $957.1 million long term debt also includes $197 million for lease liability.
Our cash balance remains robust at $1.0 billion to support our growing loan portfolio and daily operations.
OUTLOOK
The rapid changes in the capacity of technology is changing the way we conduct business and is driving a different earnings module which requires great scale in
customer transactional activities. It also requires strong investments in key financial technology and customer education to help customers transition to the digital
services. As one of the companies leading the change, it comes at great cost and requires us to be deliberate and strategic in our actions to emerge successful.
We have the basis for success having both traditional and on trend digital means of delivering remittance to our customers, our cambio business is able to respond to demand and has been growing, our loans business is reviving its growth in disbursements post covid and is expected to deliver a positive contribution this year.
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