The group recorded Rs.4 billion as profits for the third quarter, a healthy performance considering the COVID-19 pandemic situation negatively affecting the financial services and leisure sector directly and other sectors indirectly. The profit attributable to equity holders was Rs.3.42 billion up from Rs.1.46 billion a year ago.

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. 23B billion (Rs. 10.3Bn 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.

The flagship Finance company of LOLC, 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 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. The deposit books grew, demonstrating the trust the depositors place in these companies, considering the Group’s financial stability and strength.

The global expansion strategy for the financial services sector remains a key focus, with plans being made for further investments in Africa and in Asia.

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.

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

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

The Plantations and Power Generation sector improved their loss position, reducing losses to Rs. 1.6 billion from Rs. 2.3 billion during the nine months. Maturata Plantations Ltd made a significant contribution to this reduction in losses with a strong profit contribution with tea exports generating increased revenues.

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 company achieved its plantation target of 5,400 hectares of sugarcane being planted. The factory operation is running well for the second year since our involvement in the company and holds a stock of 12.2 million liters of ENA/RS to be sold, while the sales concluded stands at 5.8 million liters of ENA.

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. 2.8 billion. The group continues with the construction of properties in Sri Lanka and in Maldives, which will enable commencement of operations when the leisure business returns to normalcy.