The pioneering leasing company of Sri Lanka with a strong track record of business excellence recorded a cumulative net profit of Rs.370 Mn in the first half of the financial year 2005/2006 reflecting a 32% increase in net profits compared to the previous financial year. These results were supported by a 19% increase in net interest income and a well planned collection drive which enabled the reversal of provisions for loan losses previously made by the Company purely on a prudential basis. The group profits also increased by 37% to reach Rs.431 Mn.
Growth in business volumes achieved through LOLC’s commitment to deliver a high level of customer satisfaction resulted in a 53% increase in operating profit compared to the 45% growth in operating profit recorded during the first half of the previous financial year. These results which were attained despite volatile market conditions confirm that LOLC is well positioned to achieve sustain growth in a highly competitive market environment. Two new branches were opened at Kegalle and Embilipitiya during the period under review and the branch network now comprise 15 branches.
Return on capital employed increased to 28% and astute asset and liability management enabled LOLC achieve a 7% return assets at the end of the first six months. Total assets of the Company grew by 25% to reach Rs.10.3 Bn as at 30th September 2005.
Shareholders funds amounted to Rs.2.6 Bn at the end of the second quarter compared to Rs. 2 Bn in previous years. The market capitalization of the group increased to 4.8 Bn from Rs.3.4 Bn in the previous year. The 41% growth in shareholder wealth during this period demonstrates LOLC’s ability to provide high returns to all its stakeholders.
This year, LOLC is celebrating 25 years of successful performance in Sri Lanka. In view of the commitment to Corporate Social Responsibility (CSR) whilst pursuing profitable economic growth many CSR projects including a Tsunami housing project is included with the events to commemorate the silver jubilee. Large delegation from ORIX Japan is also expected to participate in these events.