LOLC posts top 118% profit growth for half year 2014
View(s):LOLC Group, for the six months ended September 2014, recorded 118 per cent growth in pre-tax profit (PBT) to Rs. 3.7 billion compared with Rs. 1.7 billion reported for the same period last year.
The main contributor to this growth in the profits came from LOLC’s core business, financial services, where all three regulated companies “recorded excellent performance” for the first six months of 2014. The trading sector too contributed to strong profitability while the other sectors and equity accounted investments yielded higher returns further strengthening group performance, according to a company statement to the media.
LOLC’s financial services sector including, Lanka ORIX Finance PLC (LOFC), Commercial Leasing & Finance PLC(CLC) and LOLC Micro Credit Ltd (LOMC) contributed Rs. 3 billion to the profits of the group compared with Rs. 1.8 billion recorded last year.
“The financial services sector significantly benefited from an aggressive growth in the lending portfolio and the prevalent low interest rates, which has reduced the borrowing costs. As the group made investments for future growth in terms of human capital and capacity building, operating expenses saw an increase with personnel costs moving up by 32 per cent,” it said.
It said LOLC Insurance Co. Ltd. (LOIC), the fully owned composite insurer of LOLC performed extremely well in the current year with Rs. 1.3 billion revenue, a 61 per cent growth over last year.
A share of profits of equity accounted investments includes the group’s investment in Seylan Bank and LOLC’s direct investment in PRASAC Micro Finance Institution Ltd of Cambodia. These investments together contributed Rs. 1 billion as profits to the group, a 90 per cent growth during the last 12 months.
The on-going restructuring process within the Browns Group (part of LOLC) is expected to bring about strong profitability growth going forward and higher contribution to the overall performance of the LOLC Group.
The on-going development projects in the leisure sector are in line with the estimates and two projects are nearing completion and will be commissioned in the near future. The three properties that are in operations are contributing well in revenue termsand are awaiting stronger results in the coming months, which is the season with higher tourist arrivals.
Kapila Jayawardena, Group Managing Director/CEO of LOLC said, “The financial performance of the group demonstrates the robust and aggressive growth strategy of LOLC. We expect the positive trend set in the first six months to continue in the future which would position LOLC as one of the best performing conglomerates in the country”.