LASD’s Topline Growth Holds Strong but 9M Profits Down 12.5%

  • After a first-quarter dip and modest second-quarter growth, Lasco Distributors Limited (LASD) experienced an 18.50% decline in profits for its third quarter ending December 2024 (Q3 2025) to $329.53Mn due to higher operating expenses and a reduction in “other operating income”. Subdued earnings in Q1 and Q3 meant that LASD’s earnings were down for the nine months ended March 2025. The overall performance was weighed down by higher operating expenses. 
  • In Q3, LASD’s earnings declined, despite a 5.7% rise in revenues to $7.73Bn. This growth was fueled by gains across all business divisions of the Company as demand for its portfolio continues to grow given the initiatives targeting its Pharmaceutical Business and the expansion of its export markets. Costs of sales also rose 6.6%, resulting in only a marginal increase in gross profit (+1.7%).
  • This gross profit increase did not translate to year-on-year net profit improvement. Increased costs related to sales and promotions, employee expenses, technology upgrades, and depreciation pushed operating expenses higher by 2.26%. Additionally, financing costs surged (from $0.122Mn to $7.21Mn), further weakening its performance.
  • As a result, LASD reported lower Q3 net profits of $329.53Mn (-18.5%), which, contributed to 9M net profits of J$1.05Bn (-12.5%).
  • Despite the decline in performance, in the short term, the company plans to implement contingency measures to improve inventory levels, while mitigating the effects of supply challenges to meet demand. These actions, combined with disciplined cost management, could drive future topline growth and improve profitability. LASD also remains committed to its investment and growth strategies, which emphasize portfolio innovation, expanded capabilities, and stronger consumer communication and engagement.
  • LASD’s stock price has appreciated marginally (0.47%) since the start of the year, closing Monday’s trading session at $4.31. Currently, the stock trades at a P/E ratio of 11.6x, below the Main Market Manufacturing and Distribution Sector average of 14.3x.

(Sources: JSE & NCBCM Research)