First half net profit tops Rs 3.9 billion:
LOLC gets huge profit
LOLC Group pre-tax profits for the first half of 2010/11 soared to Rs
4.5 billion with post tax profits of Rs 3.9 billion. Compared with the
previous year, pre-tax profits grew by 370 percent. The companyís
acquisitions made in the previous financial year contributed well to the
bottom line along with other income, which increased by 215 percent to
reach Rs 2.7 billion at the end of the second quarter.
The revenue of the group grew by 500 percent over last year, mainly
contributed by the trading companies in the Brown and Co PLC cluster.
The trading profits complemented well to the groupís financial
services related business income of Rs 5.8 billion, a 22 percent growth
over last year.
The borrowing costs continued to come down in line with the sliding
interest rates with the group raising funds at attractive rates. This is
mainly due to LOLCís ability to source long-term funding from foreign
multilateral and bilateral agencies at attractive rates contributing to
the reduction in borrowing costs.
The borrowing cost for the six months was three percent lower than
last year and was Rs three billion. This decrease is despite the
increase in the quantum of borrowings. Balance sheet growth was
substantial with total assets reaching Rs 98 billion, a 31 percent
growth over last six months. Aggressive growth in the lending business
increased the total advances to Rs. 47 billion, a 48 percent growth over
To support this aggressive growth in lending especially in the North
and East, and branch expansion, the Group raised additional funding at
attractive interest rates increasing the total borrowing by 29 percent
over the last six months.
LOLCís exponential growth, expansion strategy and strategic
investments has positioned the Group on a strong footing for a steady
stream of medium to long-term sustainable profitability and this is
already evident from the record increase in profits when compared with
last year same period. Aggressive growth in executions in the lending
business over the last 12 months especially in the rural areas are
contributing well to the bottom line of LOLC, Lanka ORIX Finance Co. Ltd
(LOFC), Lanka ORIX Micro Credit Ltd (LOMC) and Commercial Leasing
Company Ltd (CLC), the main lending companies of the Group.
The company is gearing up to start off the two new operations namely
LOLC Insurance and LOLC Securities. LOLC obtained a composite licence
for insurance and is expected to commence business in both Life and
General insurance in early next year.
The Group made a strategic investment into the construction sector,
by acquiring 20 percent of Sierra Holdings and 20 percent in Sierra
Constructions at a cost of Rs 1.6 billion.