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| Friday, 25 June 2004 |
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LOLC total assets up 27% to Rs 7.6 billion Lanka Orix Leasing Company (LOLC) recorded a Rs. 418 million profit after tax while the total assets of the company increased by 27% to reach Rs. 7.6 Billion. The shareholders' funds amounted to Rs. 1.8 billion. The Company attributes re-engineering of several processes and outsourcing of non-core activities to improve efficiency in corporate divisions as key factors for the growth and profit. Commenting on the annual performance of LOLC, Chairman of the company T. Ishida said that that Company's performance during the financial year 2003/2004 proved the merits of a business model which emphasises the company's customer focus, commitment over the long-term and the determination to achieve excellence in all pursuits. "Profit after tax surged to Rs. 418 million recording an unprecedented year on year growth of 64%. The total assets of the Company increased by 27% to reach Rs. 7.6 Billion and shareholder's funds as at March 31, 2004 amounted to Rs. 1.8 billion. Return on Assets improved to 5% and the Return on Capital Employed improved to 23%, from 4% and 15% respectively, when compared to the previous financial year". Ishida said. "The development of our business to the benefit of all stakeholders will depend on the willingness of our shareholders to invest in our Company. We therefore strive to provide them with an attractive return in relation to the risk profile of their investment. In addition to the interim dividends of 3.75% and 7.5% paid in October 2003 and February 2004 respectively, your Board recommends the payment of a final dividend of 8.25% amounting to a total dividend of 19.5% for the year 2003/2004. dividend payments this year will therefore amount to Rs. 92 million compared to Rs. 77 million paid for the previous financial year. During the year, we also issued bonus shares in the ratio of one new share for every share held. Net Assets increased by 10% reach Rs. 1.8 billion due to our prudent policy of retaining an adequate share of profits to fund future expansion and other strategic initiatives of your Company. Our excellent performance this year is however still not reflected in the share price. This is mainly due to the bearish trend in the Colombo equities market since November 2003. However, the Market Capitalisation of your Company recorded an impressive increase of 64% this year as well", he said. "LOLC continued to hold its pre-eminent position in the Leasing market. This was another good year for business development and new Lease executions cleared the Rs. 4 billion mark recording a 39% increase over the previous year. Kiribathgoda also enabled LOLC to offer its wide range of financial products to a broader range of customers. "For us at LOLC, sustaining the balance between business, environmental and social considerations is of central importance. Our eco-friendly project to finance Solar Home Systems in the Kurunegala District and our plan to roll out this successful model to other Districts, reflects our responsibility to society, morefully described in an accompanied report", he said. Deputy chairman of LOLC I. C. Nanayakkara said that the company also re-engineered several processes and outsourced non-core activities to improve efficiency in our corporate divisions. The positive consequences of these initiatives are already visible in the excellent business results of the year under review. "We also expanded our product range and extended our distribution platform. Supported by our innovative spirit, the Company launched a micro credit program to finance Solar Energy Systems in rural areas. In addition to improving the quality of life of people in those areas, this project also helps to mitigate greenhouse gas emissions through the displacement of conventional technologies. Other products introduced during the period include tax based leases and real estate leasing. In the course of the year, we worked through a series of measures to strengthen and transform collection procedures in order to consolidate the ongoing business success of our Company. Several changes were made to follow-up processes, allocation of responsibilities, reporting and the review of collection performance on all categories of contracts. The impressive year-end collection performance of the Company confirms the success of these innovative measures, Nanayakkara said. (SP) |
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