Lascelles sheds J$1b of profit
Published:Wednesday | August 4, 2010 | 12:00 AM
Lascelles deMercado and Company kept its cost of doing business flat in the third quarter, but falling sales, lower investment income, and rising administrative costs tore dramatically into profits of the Trinidad-owned conglomerate.
Third-quarter sales for the group, ending June 30, was down by J$688 million to J$6.01 billion.
That, plus the additional J$200 million spent on administration and marketing, set operating profits back by 60 per cent; while its bottom line shed 76 per cent or more than a billion dollars of profit, including a more than J$400 million reversal on net finance income.
At the close of the quarter, Lascelles reported J$535 million of operating profit, compared to J$1.34 billion in the 2009 period; net profit thinned to J$363 million from J$1.39 billion.
The nine month profits were also down. A near J$700 million gain on sales was totally wiped out by a similar increase in cost of doing business. The conglomerate shed half a billion in operating
Profit, from J$2.38 billion
to J$1.9 billion while its bottom line profit shrank from J$2.75 billion to J$1.6 billion, a more than J$1.1 billion decline.
The conglomerate, a J$34 billion operation by assets whose businesses range across spirits, general merchandise, investments and transportation services, posted revenue gains in three of five segments, with its 'liquors rums wine and sugar' businesses growing sales by more than J$650 million to J$12.36 billion.
Group merchandise lost ground but only by J$45 million to J$3.68 billion.
The clear loser was 'investments', under which income was chopped in half, from J$610 million to J$320 million in the post Jamaica Debt Exchange era marked by falling interest rates and lower returns on fixed income assets.
Total sales over the nine months to June 30 were J$19.6 billion, compared to J$18.9 billion in the 2009 period.
Lascelles is ultimately owned by CL Financial group, but is effectively under control of the Trinidad state, which mounted a 2009 rescue of CL Financial.
Since then, the Lascelles board has been constantly in flux, with new appointments from Trinidad replacing CL Finan-cial representatives as they resign.
The last to quit the board was chairman Shack Sultan-Khan, who left in June after Trinidad changed administrations.
A replacement was named last week - Andrew Mitchell - whose appointment was ratified by the Lascelles board on July 28 to take immediate effect.
A new chairman is still to be named.