LOLC Group, for the six months ended September recorded 118% growth in PBT reaching a strong profit signature of Rs. 3.7 Bn compared with Rs. 1.7 Bn reported for the same period last year. The main contributor to this growth in the profits comes 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.

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 Bn to the profits of the Group compared with Rs. 1.8 Bn recorded last year. LOFC records Rs. 1 Bn in PBT, a 34% growth over last year. CLC also records Rs. 1 Bn profits against Rs. 745 Mn in September 2013. LOMC too contributed Rs. 780 Mn as profits in the current year against Rs. 542 Mn recorded in the same period 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 makes investments for future growth in terms of human capital and capacity building, operating expenses saw an increase with personnel costs moving up by 32%.

Concentrated efforts put in towards strengthening the recovery efforts of the financial services sector paid dividends witnessing a 22% reduction in provisioning for bad and doubtful debts, compared with September 2013 enhancing the overall profitability of the Group.

LOLC Insurance Co. Ltd. (LOIC), the fully owned composite insurer of LOLC has performed extremely well in the current year with Rs. 1.3Bn revenue, a 61% growth over last year. LOIC has a strong presence in the non- life business and the life business is gathering momentum with a strong agency network established backed by LOLC Group’s island wide branch network.

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 Bn as profits to the Group, a 90% growth during the last twelve months.

LOLC making further expansion in its core business of financial services acquired 60% controlling stake of TPC (Thaneakea Phum Cambodia Limited) of Cambodia, the fifth largest micro finance company in Cambodia. This investment complements LOLC’s long term strategy of expanding the core business in the region. LOLC’s investment in this company was Rs. 2.6Bn and the Group expects strong profitability growth from this investment, considering the past performance of TPC and the future potential of microfinance within Cambodia which is a growing economy.

Complying with the Central Bank of Sri Lanka’s (CBSL) financial services sector consolidation exercise, CLC bought the controlling stake of BRAC Lanka Finance PLC (BRAC) for Rs. 608 Mn, a further investment by the Group into this company increasing the overall holding to 94.35 %. BRAC’s strong presence in the micro finance sector will contribute positively to the growth objectives of CLC who strengthening its presence in this high potential market segment. CLC’s strong presence in the regions together with BRAC’s contribution to the overall footprint will enable CLC to increase its micro finance business deriving stronger results in the medium to long term. BRAC will be merged with CLC in the near future in line with the consolidation strategy of CBSL.

Brown and Company PLC (BCL) led trading sector has generated strong operating profits in the current year overcoming difficult times in the agriculture equipment sales and the consumer sector. The on-going restructuring process within the Browns Group 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 terms and are awaiting stronger results in the coming months, which is the season with higher tourist arrivals.

Browns Hotels & Resorts signed up with Starwood Hotels & Resorts recently to offer the management rights to five-star Sheraton Kosgoda Turtle Beach Resort and this property will be commissioned shortly.

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”.