LOLC group profit after tax grows 54% to Rs. 1.05b

LOLC completed yet another successful year and passed the milestone of achieving Rs. 1Bn Profits, before tax. The growth in profits was 41% compared to last year. This was achieved due to the Group's business expansion strategy adopted resulting in strong revenue growth.

The contributory gross income recorded by the group grew by 53% reaching Rs. 3.95Bn.

LOLC, Sri Lanka's pioneering leasing company today represents not only a specialised leasing operation but offers a wide range of financial solutions to the customer and this wide range of products contributed well towards the growth in Assets of the group, by way of a 50% increase, to Rs. 25 Bn. The group recorded a profit after tax of Rs. 1.05Bn, a growth of 54% compared with the profit after tax of last year, Rs. 688Mn.

The holding company continued with its aggressive selling strategy and recorded exponential growth in executions achieving Rs. 12Bn, a 37% increase compared to the previous year.

Superior collection efforts of the company paid dividends with the company having to provide only Rs. 66 million as provisions against bad debts and the non performing facilities ratio seeing a further decline to 0.69% from 0.88%. The return on equity of 30% continued to maintain its positive trend of delivering superior returns to shareholders and has doubled over the last five years.

The company's profit after tax was Rs. 987Mn, a growth of 48% over last year. The company continues to enhance shareholder returns, which is clearly evident with a 736% growth in profits over the past seven years compared with the profit after tax of year 2000 of Rs118Mn.

All subsidiaries contributed well to the Group; Lanka Orix Finance Co. increased its deposit base to Rs. 1.7Bn, Lanka Orix Factors Ltd. expanded its operations locally as well as overseas recording a turnover in excess of Rs. 320 Mn and Lanka Orix Insurance Brokers Ltd. achieved an all-time high, commission of Rs. 99Mn.

The Deputy Chairman Ishara Nanayakkara, in explaining the success story of the Group especially in developing the SME, Rural, Agro and Micro sectors and the support extended by foreign funding agencies in his review, states "What followed is truly heartening and exciting.

Our history and reputation, plus our business direction and strong financial profile soon attracted funding from the local commercial banks and top funding agencies around the world, who wanted to be involved with the work we were doing in the SME and micro financing sector."

LOLC group's strategy on supporting the SME, Rural Agro and Micro sectors have attracted not only funding from the local commercial Banks but also many bilateral and multilateral funding agencies who join LOLC to develop the needy sectors of the economy.