Record year for LOLC Group

Rs 7 billion net profit :

LOLC Group recorded an impressive pre-tax profit of Rs 8.3 billion and Rs 7 billion as post-tax profits for the twelve months upto March 31, 2011.

The comparatives for the last financial year were pre-tax profits of Rs 2.8 billion and Rs 2.4 billion post tax profits. The growth in the pre-tax profits was a staggering 192 percent over last year with post-tax profits recording a growth of 194 percent.

LOLC’s core business, Financial Services concluded an exceptional year with more than 60 percent profit contribution to that of the group. The profits from the financial service sector grew three times over when compared with the previous year and ended at Rs 5.3 billion.

The total lending portfolio of the group grew by 68 percent over the previous year to Rs 58.4 billion with the increased quantum of disbursements.

The lending portfolio consists of finance lease, hire purchase, loans, Islamic financing, debt factoring, working capital solutions, micro finance and fleet management.

LOLC’s finance company, Lanka ORIX Finance Company Ltd. (LOFC)’s deposits mobilization gathered momentum throughout the year with a strong year end with a deposits base of Rs 17.4 billion an impressive growth of 72 percent over the last year’s deposit base of Rs 10.1 billion.

Total revenue from the financial services sector of the group, increased by 45 percent over F/Y 2009 and 2010 and was Rs 18.3 billion, despite the lower interest rates and resultant lower interest income during 2010 and 2011 when compared with the previous year.

The intra group revenue was Rs 2.2 billion.

The net interest cost of the financial services sector was Rs 5.9 billion for the year, lower than the previous year’s net interest cost of Rs 6.0 billion eventhough the quantum of interest bearing borrowing were much higher during the current year.

The lower interest rate environment prevalent in the country during the current financial year, and the USD and Euro denominated long-term financing that LOLC and its subsidiaries secured through bilateral and multilateral funding partners contributed towards the reduction in cost of funds.

LOLC Group’s long-term strategy is to grow the financial services sector from strength to strength capitalizing on the already established companies which has clear strategies targeting several segments of the SME and Micro sectors.

LOLC increased its investments in the leisure sector with the acquisition of four hotels on the southern coast of the country, consisting Confifi Hotel Holdings PLC, Riverina Hotels PLC, Eden Hotels PLC and Tropical Villas (Pvt) Ltd.

Three of the hotels were closed for business from May 1 to complete an accelerated refurbishment program.

After being upgraded, the hotels will be managed by a globally reputed hotel management company.

Further investments were made by the LOLC Group into the Sierra Holdings, Sierra Construction and Agstar Fertilizers.