LOLC profits soar to Rs. 575 m

Deputy Chairman/CEO Lanka Orix Leasing Company Ishara Nanayakkara said that they are planning to expand to the region and they would commence operations from Bangladesh.

LOLC has diversified into many new growth areas, in sectors such as factoring, insurance, finance, stock broking and information technology. Not only has it notched up a series of 'firsts' in these areas, it has also replicated the success of leasing in each one of these subsidiaries," said Deputy Chairman/CEO Ishara Nanayakkara.

The LOLC Group has recorded impressive growth in all aspects of its business, focused on achieving higher profitability targets and delivering superior results to all our stakeholders," he said.

LOLC profit increased to Rs. 575 Mn, a growth of 42% compared with previous year's group profit of Rs. 404 Mn.

The LOLC also surpassed Rs. 500 million in group profits.

The total executions for the year achieved by the Company reached Rs. 4.9 billion, a 12% growth compared with the previous year. The increase in executions enabled the Company to record a 12% growth in the gross income, which increased to Rs. 1.5 billion for the financial year.

The group gross income increased by 14% to reach a total gross income of Rs. 1.9 billion, Chairman LOLC Rohini Nanayakkara said. Despite the significant growth in executions, interest cost grew by 8% in absolute terms.

Effective management of cost of funds resulted in reducing the borrowing costs to total assets ratio from 6.48% to 6.09%. The operating profit before interest costs increased from Rs. 813 million to Rs. 949 Mn during the financial year, recording a 17% growth over the last year. The corresponding figure for the group was Rs. 1 billion, 22% higher compared with the last year.

Other income and expenses grew from Rs. 98 Mn to Rs. 145 Mn recording a growth of 48% over the last year. The other income includes royalty fees of Rs. 26 Mn received from group companies for using the LOLC logo and ORIX brand name, other interest income of Rs. 33 Mn, treasury administration and management fees of Rs. 12 Mn received from subsidiaries and a foreign exchange gain of Rs. 8 Mn.

The group's other income and expenses for the year was Rs. 121 Mn compared with Rs. 78 Mn recorded for the last year.

The total assets of the Company recorded 15% growth, moving from Rs. 7.6 Bn to Rs. 8.7 Bn by the year end. The prudent provisioning policy on doubtful debts enabled the Company to strengthen the balance sheet.

The growth in net assets was from Rs. 1.8 Bn to Rs. 2.3 Bn during the year, a 25% increase over the last year. The total assets of the group increased to Rs. 10.7 Bn compared with Rs. 9 Bn recorded for the previous year.

The Company's long-term to short-term borrowing ratio changed from 40:60 to 50:50 during the year, in line with the Company's strategy of diversifying the credit portfolio with long-term borrowing.

The total borrowings stood at Rs. 5.8 Bn compared with Rs. 5.3 Bn recorded for last year. The Company's long-term debt to equity ratio stood at 1.26:1. The corresponding debt to equity ratio for the last year was 1.29:1.

The earnings per share reflecting the Company's excellent performance ended the year at Rs. 11.83, a significant growth from Rs. 8.79 achieved in the last financial year.