MLL after tax profits up

MERCANTILE Leasing Limited (MLL) has an all time high result in the first nine months of the year, delivering a 54% rise in post-tax profits to Rs. 90 million as against Rs. 58.9 million reported in the corresponding period last year.

Continuing an impressive and phenomenal performance trend, MLL once again reported its best ever post-tax results, surpassing nine months, the annual after-tax profit of Rs. 77 million reported for 2004 which had hitherto been the highest profit ever reported by the company.

While turnover for the period increased by 16% from Rs. 1.0 billion to Rs. 1.2 billion, net interest earnings rose by 26% despite a competitive market and a rising interest rate environment.

Operational results have been further boosted by a significant decrease in the non-performing lease portfolio and a stringent control over operating expenses. Thus, pre-tax profits rose 39% to Rs. 102 million compared to Rs. 73 million in the previous comparative period.

Consolidated pre-tax profits for the nine-month period ended September 2005 rose to Rs. 105 million which is an increase of 30% when compared to Rs. 81 million achieved in the previous period, while consolidated post-tax profits of the Group stand at Rs. 92.2 million compared to Rs. 65.9 million, an increase of 40% over the previous period.

Expressing satisfaction at the company's continued success, MLL Managing Director and Chief Executive Officer Asoka Sirimane said "While enhancing shareholder value remains a primary focus, we constantly seek to deliver a winning proposition to all our stakeholders.

The core strength of the company is reflected in the steady appreciation in profitability over several consecutive financial quarters attributed to strategic credit and lending policies, a dynamic marketing effort in tandem with a focused recovery strategy that is evidenced by the sharply declining non-performing asset portfolio, specialised industry skills and well managed operating costs."

A subsidiary of premier blue chip conglomerate John Keells Holdings Limited, MLL is one of Sri Lanka's foremost players in the leasing and factoring industries, with subsidiaries engaged in operating leasing, insurance brokering and property management.

On September 9, JKH announced a merger between MLL and JKH's banking sector associate, Nations Trust Bank (NTB) under the provisions of Sections 206 - 208 of the Companies Act No.17 of 1982, subject to relevant regulatory approvals.

The merger is expected to be effected by the issue and allotment of NTB shares to MLL shareholders at a swap ratio of two (2) NTB shares for every one (1) MLL share, with the surviving entity being NTB.