The LOLC group said this week profit growth was strong with six months results to September 2011 showing a post-tax profit of Rs. 6.7 billion, up 75% from last year.
LOLC’s financial services subsidiaries, Lanka ORIX Finance PLC (LOFC), LOLC Micro Credit Ltd (LOMC) and Commercial Leasing Co. Ltd. (CLC), drove the business to record a 39% growth in income over the previous year.
Income earned on the lending and other related businesses was Rs 8 billion for the 6 months.
Lower capital gains and reduction in marked to market gains led the company to realize relatively lower other income in the current six months. The average borrowing costs of the group continued to slide down with several lines of foreign borrowings being received at attractive long term rates.
The borrowing costs saw a 21% growth mainly due to additional funding raised to meet the aggressive business volume growth, a statement from the company said. The trading sector recorded steady growth with a profit contribution of Rs. 481 million, up 29% growth over the previous year.
The plantations sector recorded losses for the six months as a result of the higher operating costs due to the wage hike having a negative impact on the profits derived from the diversified activities of the group.
The leisure sector recorded a negative goodwill of Rs. 3.5 billion as a result of the bargain purchase made by the Browns Investments Co. in Excel Global Holding Ltd, the parent company which fully owns Millennium Development Ltd.
“This strategic investment was made in line with the Group’s expansion and portfolio strategy, where medium to long term investments are made in selected growth sectors. The management is currently in the process of drawing up development plans for the property. Profit contribution from the other leisure investments was a negative with three of the hotels being closed for refurbishment,” it said. |
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