LOLC Group records Rs. 8.1Bn as Profit Before Tax (PBT) for 2014/15 with LOLC’s financial services sector dominating the growth in profits compared with 2013/14 of Rs.4.4Bn. LOLC’s main financial services entities comprising of the flagship finance company, Lanka ORIX Finance PLC (LOFC), Commercial Leasing and Finance PLC (CLC) and LOLC Micro Credit Ltd (LOMC), led the financial services sector to PBT growth of 73%, an increase from Rs. 4.1Bn last year to Rs. 7.1Bn in the current year. The trading sector too contributed Rs. 577Mn in PBT, recording moderate growth over last year.

The financial services sector increased its interest income by 15% from higher revenues from top line growth, following aggressive growth in the lending portfolio. This growth is commendable given the declining interest rates in the market. The overall lending book expended by Rs. 48Bn taking the lending portfolio to Rs. 140Bn from Rs. 91Bn in 2013/14. The Group was geared for higher growth with growth in the lending book amidst reducing interest rates commensurate with even lower borrowing from both foreign funding partners and local banks further reducing borrowing costs, a 17% drop in absolute terms compared with last year. This drop is despite the overall growth in the borrowing book by Rs. 47Bn.

LOFC recorded Rs. 2.2 Bn as PBT for the current year, a 54% growth compared with Rs. 11.4Bn recorded in 2013/14. CLC grew its PBT signature by 34% ending the year with Rs. 1.7Bn PBT compared with Rs.1.3Bn recorded in the previous year. LOLC’s micro lending arm LOMC too saw an excellent year with PBT reaching Rs.1.6Bn, a 53% growth compared with last year. During the year, while progress was made on aggressive portfolio growth, focused efforts were also channeled into collection of dues, improving the cash position and the portfolio quality. Conservative provisions were made for bad and doubtful debts and these were well above the regulatory requirements, strengthening the portfolios for the years to come.

LOLC’s financial services sector becomes even stronger with PBT contribution from the two foreign investments in Cambodia in PRASAC and TPC, together adding Rs.1.8Bn to the bottom line and LOLC’s stake in Seylan Bank which derived a profit contribution of Rs.1.1Bn. LOLC owns 22.25% in PRASAC, the largest micro finance company in Cambodia. PRASAC grew its profits by 65% compared with the previous year. LOLC acquired the controlling stake of TPC, the fifth largest micro finance institution in Cambodia in 2014 and the company grew its profits by 59% during the year. LOLC’s green field lending operation in Myanmar has made promising progress with solid expansion in portfolio growth and is expected to breakeven in the near future.

The trading business of the Group led by Brown & Co. PLC (Browns) too made operational profits this year of Rs.520Mn compared with the operational loss recorded in the previous year of Rs.761Mn. Completion of the restructuring process at Browns together with implementation of strong business strategies has resulted in the company turning around to make operational profits.

Browns Investments PLC(BI) the company focusing on the future investments of the Group, made several investments during the year with a view of consolidating its long term business strategy of investments into sectors with strong growth potential in the longer term. The leisure sector which comes under BI, recorded losses of Rs. 560Mn as the Group continues with the expansion of the sector with several development projects nearing completion in the coming months/years. While The Eden Resort and Spa, Dikwella Resort and Spa and The Paradise Resort & Spa contributed to the turnover of the Group, The Calm Resort and Spa in Pasikuddah was commissioned for business and is about to receive its external guests in the coming weeks. The Samudra Beach Resort is nearing completion and the 363 key property in Beruwala, Riverina Resorts is progressing in line with the plans. The Group invested into two properties in Maldives, expanding its leisure sector footprint and these properties are to commence construction in the coming months.

During the financial year, BI acquired the balance 50% stake in Free Lanka Joint Venture Ltd, securing the 100% holding of the company which owns the plantation companies, Maturata Plantations and Pussellawa Plantations along with affiliate companies in the plantation sector. BI has commenced the restructuring process in these companies aligning them to the overall long term business and growth strategies of LOLC.

Looking at the overall profit, growth and the business expansion, we are very happy with the results achieved in the year 2014/15 which is remarkable considering the challenging and turbulent business environment that prevailed throughout the year. Our financial services sector has performed exceptionally well while the other businesses are being geared up, aligning to the long term business strategy of the Group”, said Mr. Kapila Jayawardena, explaining the strong profit growth of the Group.