Financial Times

LOLC 1H net profit up 56 pct
Lanka Orix Leasing Company (LOLC), which introduced leasing to Sri Lanka, has reported what it called "impressive" results in the first half of the 2004/05 financial year, helped partly by foreign exchange gains.

Net profit before tax for the six months ended September 30 rose 56 percent to Rs 281 million compared to the first half of the previous financial year. The group profit attributable to shareholders grew by 61 percent to reach Rs 298 million.

"Sustained growth in business volumes enabled LOLC to achieve a 45 percent increase in operating profit compared to the 25 percent growth in operating profit recorded during the first quarter of the current financial year," a company statement said.

These results were achieved despite a higher level of provisioning for loan leases made by the company purely on a prudential basis. "LOLC has again demonstrated its ability to maximize return to all its shareholders despite the highly challenging market environment," it said.

Other income rose by 78 percent to Rs 72 million. This includes exchange gains amounting to Rs.27 million compared with an exchange loss of Rs. 11 million in 2003. Return on Capital Employed increased to 27 percent at the end of the six months compared to the previous year's 20 percent and return on assets increased to seven percent compared to five percent in the previous year.

Total assets of the company grew by 14 percent to reach Rs 8.3 billion. The group's market capitalization increased to Rs 3.4 billion from Rs 2.6 billion in the previous year, resulting in a 30 percent growth in shareholder wealth. The company paid an interim dividend of Rs. 21 million to their ordinary shareholders compared to the interim dividend of Rs 18 million paid during the previous financial year.

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