LOLC Group shows dynamic growth with first-ever historic profitability in Sri Lanka’s corporate sector
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Ishara Nanayakkara, Deputy Chairman of LOLC Group with Group Managing Director/CEO of LOLC Group, Kapila Jayawardena
Sri Lanka’s most valuable and globally diversified financial conglomerate, the LOLC Group, has posted a record-breaking performance for the financial year ending March 2021, achieving unprecedented bottom line results of Rs. 57 billion in Profit Before Tax (PBT), and a Profit After Tax (PAT) of Rs. 53 billion – a first for any corporate in the country.
By achieving profits on this massive scale in the history of Sri Lanka’s corporate world, the group once again consolidated its position as the top most profitable diversified corporate in the country, three years in a row – establishing LOLC as one of the largest Micro and Small and Medium Enterprises (MSME) platforms in the world, it said in a media release.
“This stunning performance by LOLC resulted in Rs. 28 billion being recorded as Profits Attributable to the Equity Holders of the parent company. The group results denote an impressive Earnings Per Share of Rs. 59.01 compared with Rs. 22.93 recorded in the previous year. Whereas, the total comprehensive income was Rs. 81 billion out of which Rs. 37 billion is attributable to the Equity Holders of the Parent company. Furthermore, the total attributable comprehensive income per share was Rs. 77.84. The resultant Net Assets Value per Share as at the year-end was Rs. 286.23 compared to Rs. 194.72 reported last year, demonstrates the exceptional value creation by the Group during the concluded financial year,” it said.
The story of LOLC’s rise into an elite blue-chip within a span of 40 years is nothing short of dynamism, surpassing competitors who have been in existence for over a century. From being a pioneering leasing company established in the year 1980, LOLC rapidly exported its expertise to global markets such as Cambodia, Myanmar, Indonesia, Philippines, and Pakistan in Asia; as well as Zambia and Nigeria in East and West Africa, bringing prosperity to people at the bottom of the pyramid. In addition, the Group has established its footprint in the Maldives and Sierra Leone in the arena of Non-Financial Services.
In Sri Lanka, the LOLC Group diversified into agriculture and plantations, leisure, renewable energy, construction, manufacturing and trading, information services, as well as research and innovation over and above its flagship financial services. All of these businesses recorded an upward trend in profitability in 2020/21, despite the adverse effects of COVID-19 being felt by Sri Lanka’s economy through 2020, coupled with weak GDP growth in the preceding year. Despite the global economic downturn experienced during the period, a strong pipeline of multilateral and bilateral funding has been available to LOLC and its operating companies both locally and globally
The LOLC Group’s Financial Services achieved Rs. 17.3 billion as bottom line despite allowing for a strong level of risk mitigating provisions amounting to Rs. 30 billion for bad and doubtful debts on a very conservative basis against Rs. 17 billion last year. Livelihoods of people in all sectors have been badly affected by the COVID-19 pandemic and at the request of the regulators of each country, the group’s Financial Services Companies have extended moratoriums to affected customers – extending a safety-net to those in need.
LOLC’s finance companies in Sri Lanka experienced a strong level of deposit inflows despite the all-time low interest rates. The flagship finance company – LOLC Finance PLC (LOFC) – with a Total Assets base of Rs. 170 billion, recorded PAT of Rs. 4.4 billion. Commercial Leasing & Finance PLC (CLC) with a Total Assets Base of Rs. 77 billion also recorded strong performance, posting a PAT of Rs. 2.2 billion in 2020/21. Meanwhile, with a Total Assets Base of Rs. 19 billion, LOLC Development Finance (LODF) PLC recorded a PAT of Rs. 155million.