1st June 2022, Colombo: Fulfilling its ambition of being a multinational, the LOLC Group recorded an upsurge in profits by as much as 46% over the previous year to deliver a Profit before Tax of Rs. 83.8Bn and Profit After Tax of Rs. 77.8Bn for the financial year ended 31st March 2022. The Total Comprehensive Income of the Group reached Rs. 161Bn, which is unparalleled in the history of any Sri Lankan corporate entity. As the most diversified conglomerate in Sri Lanka, the LOLC Group’s strong global expansion is gaining traction as it rapidly widens its global footprint across the 2 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. Amidst the economic and political disruptions being witnessed around the world, its global diversification plan ensures that the LOLC Group can sustain its upward trajectory without any adverse impact.
Commandeering a lion’s share of the local financial services market in Sri Lanka and becoming the nation’s most diversified conglomerate, 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, Philippines and Pakistan in South and South East Asia. Once ongoing negotiations are completed, the Group has planned an investment pipeline into the giant market offered by India. In Central Asia, the LOLC Group is present in Tajikistan and Kyrgyzstan while being poised to enter Uzbekistan and Kazakhstan.
On the African continent, the LOLC Group is already present in Nigeria, Zambia, Zimbabwe, Malawi, Tanzania, Kenya and Egypt. In its latest plans, the Company is looking to enter Democratic Republic of Congo (DRC), 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 liters of ENA per day and 380,000 liters of Bio ethanol per day.
Meanwhile, the Group recently acquired 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 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 with; the Elephant Corridor; Avani Bentota Resort; Club Hotel Dolphin and Hotel Sigiriya with, while Riverina Hotel is under construction with 363 keys. Reveal the Collection includes luxury bungalows, Ubuntu, the Beach House, Lantern in 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.
One of the key pillars for global success of LOLC in its financial services is its unique business model enshrined with strong customer protection principles, which uplifts livelihood at the bottom of the pyramid along with poverty alleviation and women empowerment, thereby catalysing a massive GDP growth in the respective countries. These success stories of inclusive finance have encouraged Central Banks to invite LOLC Group to set up operations in their countries to benefit the micro and SME enterprises. The impact that LOLC Group is creating in these markets is earning the Group respect and accolades globally.
At the time of its humble beginnings in 1980 as a pioneering leasing company, the LOLC Group realized the need for a development focus in the country for the SME sector, introducing factoring with ORIX and IFC. 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 Bn to support the NBFI consolidation master plan of the Central Bank of Sri Lanka. The combined entity delivered a colossal pro forma Profit Before Tax (PBT) of Rs. 25.6Bn and pro forma Profit After Tax (PAT) of Rs. 23.5Bn as at 31st March 2022. LOLC Development Finance PLC too reported a healthy financial year with Profit After Tax of Rs. 389Mn.
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. Industry leadership brings recognition on both local and international platforms. In 2021/22, LOLC Finance was awarded Most Innovative Financial Services Brand Sri Lanka 2021 and Most Trusted Financial Services Brand Sri Lanka 2021 at the Ninth Edition of the Global Brand Awards 2021; Financial Services Brand of the Year at the SLIM-Kantar Peoples Awards 2022; and Gold awards for NBFI of the Year for Financial Inclusivity, NBFI of the Year for Excellence in Customer Convenience, Financial Institution of the Year for Best Digital Payment Strategy, Best Mobile Application for Retail Payments Via Just Pay (Banks and NBFI), Overall Award Excellence in Inter-Bank Digital Payments (NBFI) and a Merit Award for the Most Popular Digital Payment Product (Banks and NBFI-Mobile Payment App) at the 4th edition of the LankaPay Technnovation Awards by Lanka Clear.
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 recognized as the fastest to achieve the Rs. 7Bn milestone within the General Insurance industry. During 2021, LOLC General Insurance recorded a premium income growth of 19.2% which was the highest growth recorded by a mid/large sized company in the General Insurance industry. At present, LOLC General Insurance is classified as a large-size company while standing to be the fifth-largest General Insurer in Sri Lanka. Further, the company emerged the winner of the ‘Best General Insurance Company of the Year’ assessed by PricewaterhouseCoopers (PwC) at the 3rd Emerging Asia Insurance Awards 2021, offered by the Indian Chamber of Commerce (ICC). The company was listed on the Colombo Stock Exchange in January 2022.
Further, LOLC Life Assurance became the first insurer within the local Life Insurance industry to achieve the Rs. 4Bn milestone within first 10 years of operation. The company ended 2021 with premium income of Rs. 4.4Bn, and a net profit growth of 36.6%. LOLC Life received international qualifications for 56 members of its sales team as qualifiers for the Million Dollar Round Table (MDRT) membership including 03 Court of The Table (COT) members for the year 2021.
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, the LOLC Group has invested in Browns, a 140-year-old trading company, which recorded a Profit After Tax of Rs. 1.8Bn 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 fertilizer.
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, Udapusselawa and Hapugaskanda plantations. The UK based Finlays Group is a 128-year-old company which is exiting the plantations business in Sri Lanka, marking the end of ownership by overseas companies in the sector, and was seeking a preferred partner with good governance standards and a solid reputation to carry on the legacy. The Group also holds Browns Teas and Tropical Island Commodities, which are export companies of tea and cinnamon for export, 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 fertilizer, Sierra Piling and Sierra Cables Sierra ready mix. Agstar, the fertilizer 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 USD 117Mn for multiple projects in the Port City, namely, the Colombo International Financial Centre, Marina Hotel and the Marina.
Demonstrating its visionary approach, the LOLC group has invested in research and innovation through its subsidiary LOLC Advanced Technologies and is currently in the commercialization phase for various technologies such as graphite to graphene conversion and rice fortification. Graphene is the thinnest material known to man and about 200 times stronger than steel. Graphene is also an excellent conductor of heat and electricity and has interesting light absorption abilities. It is truly a material that could change the world, with unlimited potential for integration in almost any industry. 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 3 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.
Ranging from the bottom of the pyramid financial inclusion to carving a footprint in the latest path-breaking technologies, the LOLC Group is nurturing further plans to expand its footprint across more overseas markets while diversifying its businesses to become a globalized entity, anti-inflationary in nature, to tide over any and every economic crisis.
Ishara Nanayakkara, Deputy Chairman – LOLC Holdings PLC and Kapila Jayawardena, Group Managing Director/CEO – LOLC Holdings PLC