LOLC Group records Rs. 45 bn PAT for 9 months | Daily News

LOLC Group records Rs. 45 bn PAT for 9 months

Ishara Nanayakkara - Deputy Chairman and Kapila Jayawardena - Group Managing Director/CEO, LOLC Group
Ishara Nanayakkara - Deputy Chairman and Kapila Jayawardena - Group Managing Director/CEO, LOLC Group

LOLC Holdings PLC (LOLC) releasing its nine months results recording a PAT of Rs. 45 billion after adjusting for corporate tax on a PBT of Rs. 48 billion. The Group records a Rs. 4 billion as profits for the quarter, a healthy performance considering the COVID-19 pandemic situation negatively affecting the financial services and leisure sector directly and other sectors indirectly.

The Group’s Financial Services Sector contributed Rs. 3.5 billion as profits and these results were achieved allowing a strong level of risk mitigating provisions amounting to Rs. 23 billion (Rs. 10.3 billion in 2019)for bad and doubtful debts being made, over and above the regulated levels.

Conservative provisioning was made considering the potential risks arising from the pandemic and the dull economic environment across all countries in which the Group operates.

LOLC Finance PLC (LOFC) recorded a PAT of Rs. 4.2 billion compared with Rs. 961 million achieved in the comparable period last year.

Commercial Leasing and Finance PLC (CLC) recorded Rs. 1.9 billion as PAT for the current nine months compared with Rs. 1.2 billion made in the previous year. The profit of LOLC Development Finance PLC (LOLCDF) was Rs. 216 million compared with a Rs. 124 million recorded in the last year.

LOLC’s foreign Financial Services entities contributed well to the profits of the Group, with LOLC Cambodia leading the way with a Rs. 5.7 billion PAT, followed by LOLC Myanmar Micro Finance Ltd, the greenfield business operation of LOLC,making a profit contribution of Rs. 554 million as PAT. The rest of the companies also made healthy progress, despite the global impact of COVID-19.

The three finance companies in Sri Lanka experienced a strong level of deposit inflows despite the all-time low interest rates.

LOLC currently operates in Sri Lanka, Cambodia, Myanmar, Indonesia, Philippines, Pakistan, Nigeria and Zambia in Financial services, Maldives and Sierra Leonne in Non-Financial Services businesses.

Despite the global economic downturn, LOLC Group has a strong pipeline of multilateral funding available to LOLC and its operating companies both locally and globally.

LOLC’s two insurance companies, LOLC General Insurance Ltd and LOLC Life Assurance Ltd., recorded a strong level of business growth contributing Rs. 970Mn and Rs. 325Mn respectively, as profits in the nine months up to December.

LOLC’s trading and manufacturing businesses made a profit contribution of Rs. 2Bn compared with a loss of Rs. 1Bn recorded in the previous year. Brown and Company PLC made Rs. 1.2Bn as profits in the nine months.

The Plantations and Power Generation sector improved their loss position, reducing losses to Rs. 1.6Bn from Rs. 2.3Bn during the nine months.

The operation in Sierra Leonne, Sunbird Bio Energy Ltd., shows strong potential in the medium term with the company achieving its primary goals in the short span of time since the investment. The leisure sector was directly affected by the COVID-19 pandemic. However due the Group’s timely conversion of these properties into repatriation hotels, the loss was contained at Rs. 2.8Bn. Anticipating strong growth in the leisure business in the future EDEN Hotels Lanka PLC acquired the controlling interest of Serendib Leisure for Rs. 798Mn. In December, Browns Investments PLC, LOLC’s Strategic Investment Arm has entered into an agreement to partner with China Harbour Engineering Company Limited (CHEC) and invested USD 1 Bn.

Kapila Jayawardena commenting on the performance said, “The sale of PRASAC Micro Finance Company at the opportune time made the Group stand strong during tiring times. LOLC has been resilient to the negative effects of the pandemic with the diversification and the timely expansion into the region and beyond.”

“We are well geared to face the challenges in the coming months and have aligned our mid-term to long-term strategies to stay strong and to reap the benefits that will be present during the recovery period and after.”