Multinational aspirant LOLC Group delivers PAT of Rs.77.8bn for FY22

Fulfilling its ambition of becoming a multinational, LOLC Group recorded an upsurge in profits by as much as 46 percent over the previous year to deliver a profit before tax of Rs.83.8 billion and profit after tax (PAT) of Rs.77.8 billion for the financial year ended on March 31, 2022 (FY21/22). 

The total comprehensive income of the group reached Rs.161 billion, which is unparalleled in the history of any Sri Lankan corporate entity. 

The group had booked a negative goodwill of Rs.23 billion in FY22, stemming from its acquisitions during the financial year. As the most diversified conglomerate in Sri Lanka, LOLC Group’s strong global expansion is gaining traction, as it rapidly widens its global footprint across the two continents of Asia, including Central Asia and Africa, across financial services, leisure and plantations. A key highlight of its historic profitability this year is that the group derived a major portion of its revenues from its global operations, without being reliant on local operations or for that matter any one market. 

LOLC Group made its initial investment into Cambodia way back in 2007 and has since established a firm footprint in many countries, including Cambodia, Myanmar, Indonesia, the Philippines and Pakistan in South and South East Asia. 

Once the ongoing negotiations are completed, the group has planned an investment pipeline into the giant market offered by India. In Central Asia, LOLC Group is present in Tajikistan and Kyrgyzstan while being poised to enter Uzbekistan and Kazakhstan. 

On the African continent, LOLC Group is already present in Nigeria, Zambia, Zimbabwe, Malawi, Tanzania, Kenya and Egypt. In its latest plans, the company is looking to enter the Democratic Republic of Congo, Ghana, Uganda and Rwanda. 

Building on its plantation management expertise, the group operates sugarcane plantations in Sierra Leone. Sunbird Sierra Leone Limited (SBSL) is a large agro-based company with 23,500 hectares of land, with the option to increase it to 50,000 ha, along with a sophisticated production facility, which produces Extra Neutral Alcohol (ENA). SBSL has a production capacity of 100,000 litres of ENA per day and 380,000 litres of bio ethanol per day. 
Meanwhile, the group recently acquired a luxury leisure property in Mauritius, the Radisson Blue, with 100 keys and will soon be the largest leisure operator in the Maldives, expecting to add 1,077 keys to the market soon. 
The property developments nearing completion in the Maldives are the Nasandhura Palace Hotel, with 135 keys and 118 apartments, Bodufaru – 470 keys, Browns Ari Resort – 100 keys and Browns Raa atoll and STO Hulumale, with 254 keys. 

In Sri Lanka, the group commands a room capacity of 909 keys, with a further capacity of 363 keys under construction and is among the largest leisure operators in the country. 

The leisure properties in Sri Lanka consists of Eden Resort and Spa, Occidental Paradise Dambulla, Sheraton Kosgoda Turtle Beach Resort, The Calm Resort & Spa, Dickwella Resort and Spa, The Elephant Corridor, Avani Kalutara, Club Hotel Dolphin and Hotel Sigiriya while Riverina Hotel, with 363 keys, is under construction. 
The Reveal Collection includes luxury bungalows, Ubuntu, The Beach House, Lantern Beach House Mirissa and Lavender House Pussellawa. The leisure business is further complemented with the destination management arm of the group, Ceylon Roots, providing inbound travel services.

Meanwhile, within the ambit of its status as the largest financial services provider in Sri Lanka, the group has diversified its offerings by investing in commercial banks, including Seylan Bank and Hatton National Bank and in development banking with Sanasa Development Bank and HDFC Bank. 

In the field of non-banking financial institutions (NBFI), LOLC Finance PLC and Commercial Leasing and Finance PLC merged recently to form the largest NBFI in Sri Lanka, with a total asset value of Rs.311 billion, to support the NBFI consolidation master plan of the Central Bank of Sri Lanka. 

Looking ahead, the group is focused on taking its lifestyle-based payment gateway iPay global, which will give the group’s financial services operation a cutting edge in global markets, reflecting its innovation and global drive. 
Following the success of its financial services business model targeting grassroots population, LOLC’s insurance business has grown stridently over the years. In Sri Lanka, LOLC General Insurance was recognised as the fastest to achieve the Rs.7 billion milestone within the general insurance industry. 

During 2021, LOLC General Insurance recorded a premium income growth of 19.2 percent, which was the highest growth recorded by a mid/large-sized company in the general insurance industry. 

Further, LOLC Life Assurance became the first insurer within the local life insurance industry to achieve the Rs.4 billion milestone within the first 10 years of operation. The company ended 2021 with a premium income of Rs.4.4 billion and a net profit growth of 36.6 percent. 

Replicating the success of the micro, small and medium enterprise financial services operation globally, the group is now poised to launch its insurance business model to global markets under the brand of Serendib Insurance, which was launched in Cambodia as its maiden global insurance venture to support micro and SME customers’ insurance needs, as this provides a vital safety net to the bottom of the pyramid population in the event of an unforeseen eventuality and forms a critical pillar in the client protection practices of the group. In its diversification strategy outside financial services, LOLC Group has invested in Browns, a 140-year-old trading company, which recorded a profit after tax of Rs.1.8 billion for the year 2021 across its business divisions – general trading, consumer electronics, power, automotive, agriculture, battery, thermal, chemical, heavy equipment, marine, vet pharma, environmental engineering and fertiliser.

Through its strategic investments arm Browns Investments, the group’s plantation sector, which operates Maturata and Gal Oya plantations, recently acquired two plantations from the Finlays group, namely the Udapusselawa and Hapugaskanda plantations. 

The group also holds Browns Teas and Tropical Island Commodities, which are export companies of tea and cinnamon, the forward integration for the plantations sector. Further, the group has invested to create the largest cinnamon plantation in the world and is currently engaged in value-added extraction for spices. 

In addition, the group remodelled its holdings in the Sierra group during the year. Divesting the shareholding in Sierra Construction and Sierra Holdings, the group acquired Agstar fertiliser, Sierra Piling and Sierra Cables Sierra ready mix. Agstar, the fertiliser company, is a strategic investment for the group. Browns Engineering and Construction and its subsidiary Browns metal and sands and Ajax engineering form an integral part of the group. 
In a significant development, Browns Investments PLC has already invested US $ 117 million for multiple projects in the Port City, namely the Colombo International Financial Centre, Marina Hotel and the Marina. 

Meanwhile, LOLC Group has invested in research and innovation through its subsidiary LOLC Advanced Technologies and is currently in the commercialisation phase for various technologies such as graphite to graphene conversion and rice fortification. 

LOLC’s Ceylon Graphene Technologies (CGT) is the most competitive industrial-scale graphene manufacturer, product developer and researcher in the world, due to its ownership of the complete product lifecycle. After three years of rigorous R&D, setting up of manufacturing plants and obtaining world-class accreditations and certifications, CGT is ready to be known worldwide as the world’s best graphene supplier with the best in-house R&D facilities.