Cost Containment Measures & Higher Revenues Bolster LASM’s Bottom-

• Greater revenues and lower indirect expenses supported a 40.5% (or $397.96Mn) year-over-year increase in Lasco Manufacturing’s audited net profit to $1.40Bn (EPS$:0.33). Owing to the effects of product mix and gains in manufacturing efficiencies, revenues were able to grow by 4.2% (or $332.00Mn) and influence a 90 basis point increase in the gross margin. Cost containment measures were also very instrumental in the improvement in net profit. Selling and promotional expenses fell by 53.0% (or $154.16Mn), while admin and other expenses dropped by 13.0% (or $177.13Mn). 
• In 2020 the Junior market tax break ended and the full income tax rate of 25% became applicable to the company’s earnings. Higher tax expenses ($159.06Mn) and a $135.33Mn rise in the cost of sales, therefore, tempered the overall improvement in LASM’s financial performance. 
• Management has indicated that notwithstanding the roll-out of effective vaccines and mass vaccinations to contain the virus and its adverse impacts, material prices and shipping costs are escalating, while the general availability of some materials become problematic. These and other headwinds, such as currency volatility and depressed consumer purchasing power, may adversely affect the company in the near-term. 
• Management has also indicated that it will continue to give special attention to cost as well as cash management, and protecting its supply chain to minimize the impact of the pandemic on the business. 
• The stock has appreciated by 45.1% since the start of 2021 and currently trades at a P/E of 16.7x, which is below the Junior market manufacturing sector average of 17.5x.       

(Source: Company Financials)