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LOLC retains the top spot in the LMD 100 as the Most Profitable Listed Entity, three years in a row

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Having recorded a whopping post-tax profit of Rs. 53 billion, LOLC retains the No. 1 spot in the 28th edition of the LMD 100 as Sri Lanka’s ‘Most Profitable Listed Company’ in 2020/21. LOLC, Sri Lanka’s most valuable and globally diversified financial conglomerate, shattered the corporate profit records in Sri Lanka for the 2020/21 financial year by achieving unprecedented bottom line results of Rs. 57Bn in Profit Before Tax (PBT). As a result of achieving profits on this massive scale in the history of Sri Lanka’s corporate world, the Group was able to consolidate its position as the topmost profitable diversified corporate in the country, three years in a row – carving out a name for LOLC as one of the largest Micro and Small & Medium Enterprises (MSME) platforms in the world.

Speaking about the achievement, LOLC Group Managing Director/CEO, Kapila Jayawardena said, “To become Sri Lanka’s Most Profitable Listed Company for three consecutive years is a result of our strategic diversification, into different industries and across borders. This was possible due to our strong operational capabilities that gives us a unique competitive advantage. That is why, we were able to steer through a pandemic with extended periods of a least favourable business climate. Despite the global economic downturn, multilateral and bilateral funding agencies have continued to work closely with us and this reflects the confidence placed in us and the growth potential that LOLC has exhibited throughout, even during the most turbulent of times.”

During the FY 2020/21, LOLC successfully infused a significant amount of foreign exchange into Sri Lanka’s economy through the 1st tranche divestment of PRASAC in Cambodia. It was the largest ever transaction recorded by a Sri Lankan entity. The Group also sustained its credit rating of ‘SL A’ amidst a year engulfed by the many challenges posed as a result of the pandemic. LOLC also did not retrench or enforce pay cuts on any of its employees locally or overseas even during these turbulent times. Moreover, the conglomerate continued its sustainability initiatives through its various corporate social responsibility (CSR) and green initiatives. For instance, 76% of the electricity consumed by the Group in Sri Lanka was generated by renewable energy sources minimising LOLC’s carbon footprint.



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Business

Seven factors of concern at upcoming Monetary Policy Review

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by Sanath Nanayakkare

The Central Bank of Sri Lanka (CBSL) is scheduled to announce its latest monetary policy review on 20th January 2022, with all eyes on dwindling foreign reserves and foreign currency exchange in the country.

In this context, First Capital Research has named 7 factors of concern that could be taken into account at the upcoming monetary policy review. They are as follows.

* Foreign Reserves USD 3.1 billion – Dec 2021

* Inflation CCPI 12.1% – Dec 2021

* GDP Growth -1.5% – 3Q2021

* Private Credit LKR 60.5 billion – Nov 2021

* 03M T-Bill rate 8.38% as at 12.01.22

Liquidity and CBSL Holdings LKR -364.0 billion and LKR 1.42 trillion

Balance of Trade (BOT) and Balance of Payment (BOP) USD -6.5 billion and USD -3.3 billion for Jan-Oct 21

First Capital Research’s Policy Rate Forecast – Jan 2022-Apr 2022 notes that they believe the CBSL may highly consider tightening the monetary policy rates in this policy review but given the concerns over economic growth, there is a probability of 40% for CBSL to maintain its policy stance at current levels.

“With high frequent indicators improving in line with expectations, we have eliminated any probability of a rate cut. We expect a continued increase in probability for a rate hike in order to prevent overheating of the economy amidst the given fiscal and monetary stimulus,” they said.

As per First Capital’s view, CBSL either can choose to hike policy rates by 50bps or 100bps or hold policy rates steady, while a rate cut is off the table due to the high debt repayment and the high domestic borrowing requirement.

First Capital believes that there is a 60% probability for a rate hike due to the remedial actions required in achieving external stability.

However, there is also a 40% probability to maintain the policy rates at its current level in order to further improve the high frequency indicators.30%, they noted.

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Sri Lanka’s dash brand enters international markets

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Multichemi International Ltd, which manufactures and distributes a wide range of products under dash, one of Sri Lanka’s leading detergent and household care brands, has begun exporting its products to several international markets in Asia and Oceania, with plans also to enter Africa. The dash brand includes a wide range of products in car care, household care, home fragrances and laundry care sectors. Multichemi International Ltd, which has been awarded ISO 9001:2015 certification, is a Sri Lankan pioneer in environment-friendly cleaning products, having launched the country’s first biodegradable, safe cleaning products over 28 years ago.

Amila Wijesinghe, General Manager of the Company said,”Having conquered the domestic market, we are now ready to capture the international market. We are confident that our products which are of high quality will receive a good demand overseas as well. The feedback we have received so far from our overseas customers is extremely encouraging. We are dedicated to taking our products to the international market, to bring in foreign currency to the country and help uplift the economy”,

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Janaka Abeysinghe appointed SLT CEO

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Sri Lanka Telecom PLC has announced the appointment of Janaka Abeysinghe as its Chief Executive Officer (CEO) with effect from February 1, 2022.

The incumbent CEO Kiththi Perera will be overseas on leave for a period of two years to pursue higher studies, according to a stock market filing by the company.

Abeysinghe joined SLT in 1991. In his present role, he leads the enterprise and wholesale business of SLT that provides integrated voice and data solutions to enterprises, government institutions, domestic telco operators and global wholesale carriers.

In his career at SLT spanning 29 years, he has held a number of senior positions, including general manager Enterprise and International Sales and has extensive experience in the areas of Enterprise Digital Services, Enterprise Communications Solutions, Data Communications, Business Development, Domestic and International Switching Operations and Global Wholesale Voice & Data Business.

He holds a Master’s Degree in Electrical and Computer Engineering from the University of Kansas, USA and a BSc degree in Electronics and Telecommunications Engineering with a First Class Honours from the University of Moratuwa.

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