FY2025/26 annual results confirm what the April 2026 analysis flagged: LOLC group's accounting machinery is running harder than ever — Rs. 98.7 Bn in new "acquisition gains" at BIL, up from Rs. 63 Bn. But the engine is overheating. Brown & Company (BRWN) swung from a Rs. 31.2 Bn profit to a Rs. 27.1 Bn loss the moment bargain-purchase gains dried up. Africa plantations are being restructured. LOFC borrowings exploded 527%. This is not improvement — this is acceleration toward a reckoning.
Not investment advice. This is personal independent analysis by DamithInvest for educational purposes only. Not a registered advisor under the SEC Sri Lanka. All analytical labels are personal observations on publicly available financials — not allegations of fraud or buy/sell recommendations.
LOLC.N0000
LOLC Holdings
FY26 EPS: Rs.65.02
−38% vs FY25 EPS Rs.104.61
PAT: Rs.23.4Bn ↓43%
BIL.N0000
Browns Investments
NAV: Rs.12.33
↓ from Rs.13.58 (-9.2%)
Equity declined Rs.15.3Bn
BRWN.N0000
Brown & Company
EPS: −75.27
vs +152.51 in FY25 — CRASH
PAT: Rs.−27.1Bn
LOFC.N0000
LOLC Finance
PAT: Rs.27.41Bn
+9% YoY · EPS Rs.0.89
Borrowings +527%
SIRA.N0000
Sierra Cables
PAT: Rs.2.66Bn
+194% · Revenue +73%
Outstanding performer
⟳ UPDATED VERDICT — FY2025/26 ANNUAL
FY2025/26 is the year the LOLC accounting playbook was stress-tested — and failed. BRWN (Brown & Company) is the clearest proof: when bargain-purchase gains fell from Rs. 23.8 Bn to Rs. 2.28 Bn, the company swung from a Rs. 31.2 Bn profit to a Rs. 27.1 Bn loss, and EPS crashed from Rs. +152.51 to Rs. −75.27. This single data point confirms the April 2026 thesis beyond doubt — the prior year "profits" were accounting artefacts, not earned income. At LOLC Holdings group level, consolidated PAT fell 43% to Rs. 23.4 Bn and EPS to Rs. 65.02, despite BIL recording an even larger Rs. 98.7 Bn acquisition gain than last year. Meanwhile, Africa plantations are being restructured with Rs. 1.8 Bn in voluntary retirement costs, confirming the Lipton integration is not going well. The one genuine earner — LOLC Finance — continues to grow PAT, but its borrowings exploded 527% in a single year, introducing a new systemic risk. Sierra Cables is a genuine bright spot: revenue +73%, PAT +194%, US export strategy working.
§01
Master scorecard: FY25 vs FY26
Is it getting better or worse?
All five companies filed annual results for the year ended 31 March 2026. Here is the definitive comparison of reported financials — and what they actually mean.
Company
Metric
FY2024/25
FY2025/26
Change
What it means
LOLC
Group PAT (continuing)
Rs. 52.5 Bn
Rs. 24.2 Bn
−54%
Acquisition gains halved → profits halved
LOLC
Results on acquisition/divestment
Rs. 54.3 Bn
Rs. 29.7 Bn
−45%
Still massive but declining
LOLC
EPS (basic)
Rs. 104.61
Rs. 65.02
−38%
Real earnings quality unchanged
BIL
Results on acquisition
Rs. 63.1 Bn
Rs. 98.7 Bn
+56% (BIGGER TRICK)
SAME accounting technique, LARGER scale
BIL
Total equity (group)
Rs. 271.5 Bn
Rs. 256.2 Bn
−5.6%
Equity DECLINED despite Rs.98.7Bn paper gain
BIL
NAV per share
Rs. 13.58
Rs. 12.33
−9.2%
Book value erosion = real wealth destruction
BRWN
Total PAT (group)
Rs. +31.2 Bn
Rs. −27.1 Bn
−Rs.58.3Bn swing
Gain ran out → real losses revealed
BRWN
EPS (basic)
Rs. +152.51
Rs. −75.27
−228pt swing
Most dramatic EPS reversal in group history
BRWN
Gain on bargain purchase
Rs. 23.8 Bn
Rs. 2.3 Bn
−90%
The trick ran dry — losses unmasked
LOFC
PAT
Rs. 25.1 Bn
Rs. 27.4 Bn
+9%
Genuine growth — still the only real earner
LOFC
Wholesale borrowings
Rs. 15.7 Bn
Rs. 98.4 Bn
+527%
Massive funding risk introduced in 1 year
SIRA
Revenue
Rs. 9.26 Bn
Rs. 15.97 Bn
+73%
US export strategy delivering real growth
SIRA
PAT
Rs. 0.90 Bn
Rs. 2.66 Bn
+194%
Best earnings quality improvement in group
§02
Same trick — bigger stakes
BIL · Results on acquisition · FY26
98.7Bn
LKR · Results on acquisition · BIL FY25/26
Browns Investments (BIL) recorded Rs. 98.7 Bn in "Results on acquisition of group investments" in FY26 — up from Rs. 63.1 Bn in FY25 and Rs. 54.5 Bn bargain-purchase gain the prior year. The group is escalating its reliance on acquisition accounting to sustain headline profitability. Yet total equity DECLINED Rs. 15.3 Bn (−5.6%) despite the Rs. 98.7 Bn paper gain. This means the underlying businesses destroyed Rs. 114+ Bn of value in a single year — losses, finance costs, and currency losses that exceeded even the inflated acquisition credit. The NAV per share eroded from Rs. 13.58 to Rs. 12.33.
BIL acquisition gains vs equity movement
FY24/25 vs FY25/26 · Rs. Bn · Group level
Acq. gain FY25
Rs.63.1Bn
Acq. gain FY26
Rs.98.7Bn ↑56%
Equity FY25
Rs.271.5Bn
Equity FY26
Rs.256.2Bn ↓5.6%
Net fin. cost
(Rs.35.2Bn)
BIL operating profit vs financing burden
FY25/26 · Rs. Bn · The structural gap
Operating profit
Rs.8.6Bn
Net finance cost
(Rs.35.2Bn) — 4× ops
Gross profit
Rs.18.8Bn
Revenue
Rs.99.1Bn +60%
◆ The Core Problem at BIL
BIL's operating business generates Rs. 8.6 Bn in operating profit. Its net finance costs are Rs. 35.2 Bn — more than four times operating profit. Without the acquisition accounting tricks, BIL would report a structural operating loss of approximately Rs. −26.6 Bn annually. Every year this continues, the debt compounds and the equity base erodes further. The only mechanism keeping PAT positive is the non-cash acquisition gain line — which by definition cannot continue indefinitely.
What new acquisitions are driving FY26's Rs. 98.7 Bn? The BIL notes reveal two confirmed new acquisitions: (1) Udapussellawa Plantations PLC acquired a 75.27% stake in Tea Smallholder Factories PLC (TSHF) for Rs. 793 Mn, generating a bargain-purchase gain; and (2) Browns Power Holdings acquired FLMC Plantations Group at 100% for Rs. 4.8 Bn, with a gain on bargain purchase. The remainder of the Rs. 98.7 Bn is likely from revaluation of previously acquired Lipton plantation assets (Kenya, Tanzania, Rwanda) under IFRS 13 fair-value hierarchy. These are paper marks on assets the market (Lipton/Unilever) chose to exit — not cash income.
§03
Brown & Company: The jig is up
BRWN · EPS +152 → −75 · The proof
Brown & Company (BRWN) is the most important data point in this entire analysis. It is the company where the April 2026 thesis was either going to be proven correct — or wrong.
BRWN: Earnings reversal — the accounting trick ran dry
Annual PAT (Rs. Bn, Group) and Bargain Purchase Gain — FY25 vs FY26
Note: FY26 operating profit improved to Rs.8.95Bn (vs Rs.2.37Bn FY25) — but Rs.43–46Bn in finance costs and discontinued-operations losses overwhelmed it, producing the Rs.27.1Bn total group loss.
▲ FY25 EPS (Annual)
Total EPS — Brown & Company
+152.51
Driven by Rs.23.8Bn bargain purchase gain
Investors who bought BRWN based on FY25 EPS of Rs. 152.51 received accounting profit, not earned income. Strip out the Rs. 23.8 Bn non-cash gain and the underlying EPS was deeply negative even in FY25.
▲ FY26 EPS (Annual)
Total EPS — Brown & Company
−75.27
Bargain purchase gain collapsed to Rs.2.28Bn
The gain ran dry and the underlying loss was unmasked. Operating profit improved slightly (Rs. 8.95 Bn vs Rs. 2.37 Bn), but finance costs and discontinued losses overwhelm. This is the structural reality the FY25 profits concealed.
▲ Africa Restructuring Signal
East Africa Voluntary Retirement Plan
Rs.1.79Bn
Non-recurring VRS charge · Browns Plantations East Africa + Tanzania
The annual report explicitly discloses a voluntary retirement plan at Browns Plantations East Africa and Browns Plantations Tanzania. Rs. 1.79 Bn in non-recurring costs charged to group P&L. This is the Lipton integration failing in practice — headcount reduction before operational turnaround is the wrong order.
▲ BRWN Red Flags (FY26)
EPS: −75.27 vs +152.51 — the single most damning data point in the group. No ambiguity.
PAT: −Rs.27.1 Bn — a Rs. 58.3 Bn swing in one year when non-cash gains dried up.
Biological asset fair-value gains: Rs. 5.83 Bn non-cash gain still embedded in FY26 — without it, loss would be Rs. −32.9 Bn.
Operating profit Rs. 8.95 Bn vs finance cost Rs. 43–46 Bn — the ratio hasn't improved materially.
Total equity fell Rs. 16.4 Bn to Rs. 258.5 Bn despite OCI items.
● BRWN Green Flags (FY26)
Revenue +47% to Rs. 154.4 Bn — organic topline growth is genuine.
Plantation GP: Rs. 15.7 Bn (+59%) — revenue Rs. 63.6 Bn from plantations at 24.7% margin. Integration is scaling even if imperfectly.
Manufacturing & Engineering GP: Rs. 5.15 Bn (+110%) — includes Sierra Cables turnaround showing in segment.
Administrative expenses restructuring — costs being managed.
NAV Rs. 518.14 vs Rs. 470.77 — book value growing despite PAT loss (OCI from revaluations).
§04
LOLC Holdings: Profit down 43% — what the numbers mean
LOLC group consolidated · FY26
LOLC.N0000
LOLC Holdings PLC Group consolidated · Rs.2.32 Trillion in assets
NEUTRAL → CAUTIOUS (downgrade)
Group PAT FY26
Rs.23.4Bn
−43% YoY
EPS Basic
Rs.65.02
−38% vs 104.61
NAV per share
Rs.822.46
+14% vs 721.16
Gross Income
Rs.430.3Bn
+28% YoY
Acq. Gain FY26
Rs.29.7Bn
−45% vs 54.3Bn
Total Assets
Rs.2.32T
+14.4% YoY
PBT FY26
Rs.31.2Bn
vs Rs.50Bn FY25
Total Equity
Rs.654.3Bn
+8.3% YoY
The NAV improvement (+14%) versus the PAT decline (−43%) creates a counterintuitive picture. The explanation: significant OCI gains (revaluations, translation adjustments) flowed through other comprehensive income and lifted equity, while the income statement gap widened as acquisition gains shrank. The Rs. 29.7 Bn "results on acquisition" at consolidated LOLC level is materially lower than BIL's Rs. 98.7 Bn — reflecting inter-company eliminations, NCI shares, and consolidation adjustments. The underlying message is the same: strip acquisition accounting and LOLC's core profitability is approximately Rs. 20–25 Bn — flat since FY23.
LOLC Holdings — PAT history: the pattern is clear
Every "blowout year" is an M&A gain year · Rs. Bn · FY21–FY26
FY21 (Prasac)
53.2Bn
FY22 (Prasac)
77.6Bn RECORD
FY23 (base)
21.7Bn
FY24 (base)
21.75Bn
FY25 (Lipton)
41.0Bn
FY26 (new deals)
23.4Bn −43%
Orange = M&A gain year · Blue = base year · Grey = FY26 declining
▲ Red Flags — LOLC Holdings FY26
PAT −43% despite bigger acquisition gains at subsidiary level.
Results on acquisition falling −45% at consolidated level: the trick is losing potency.
Net finance cost Rs. 47.1 Bn — massive debt servicing at group level.
BRWN's Rs. −27 Bn loss flowing upward into group accounts.
No Port City update in annual results — the investment if made is generating zero disclosed return.
● Green Flags — LOLC Holdings FY26
NAV +14% to Rs. 822.46 — equity base growing through OCI even as PAT falls.
Revenue +45% to Rs. 158.2 Bn — topline scaling strongly.
LOFC carrying the group — Rs. 27.4 Bn real NBFI profit shields the consolidated account.
New plantation acquisitions (TSHF, FLMC) expand Sri Lanka tea footprint with real assets.
§05
LOLC Finance: Still the real earner — but a new risk emerges
LOFC · PAT +9% · Borrowings +527%
LOFC.N0000
LOLC Finance PLC Sri Lanka's largest NBFI · Rs.558.55 Bn assets
POSITIVE → WATCH (borrowings)
PAT FY26
Rs.27.41Bn
+9% vs Rs.25.1Bn
Net Interest Income
Rs.49.93Bn
+19% YoY
Gross Loans
Rs.423.05Bn
+39% vs 305.24Bn
Total Assets
Rs.558.55Bn
+30% YoY
Customer Deposits
Rs.271.50Bn
+20% vs 225.72Bn
Borrowings
Rs.98.40Bn
+527% vs Rs.15.7Bn
Tier 1 Capital
23.42%
Strong buffer
EPS (basic)
Rs.0.89
+17% vs Rs.0.76
LOFC delivered another year of genuine operating profit growth — PAT up 9% to Rs. 27.41 Bn, net interest income up 19%, lending portfolio up 39%. The core business is performing. However, one number demands urgent attention: borrowings exploded from Rs. 15.7 Bn to Rs. 98.4 Bn in a single year (+527%). This is not gradual balance sheet management — it is a step-change in wholesale funding dependence. The loan portfolio grew Rs. 117.8 Bn while deposits grew only Rs. 45.8 Bn. The funding gap of Rs. 72 Bn was plugged almost entirely by wholesale borrowings.
LOFC: Loan growth vs deposit growth vs borrowings
FY25 → FY26 · Rs. Bn · The funding gap
Loans FY25
Rs.305.2Bn
Loans FY26
Rs.423.1Bn +39%
Deposits FY25
Rs.225.7Bn
Deposits FY26
Rs.271.5Bn +20%
Borrowings FY25
Rs.15.7Bn
Borrowings FY26
Rs.98.4Bn +527%
⚠ LOFC Borrowings — The New Risk
LOFC's aggressive 39% loan growth is real and profitable, but it has created a structural mismatch: deposit growth (20%) lags loan growth (39%) by 19 percentage points. The funding gap is now plugged with wholesale borrowings that are short-duration, market-rate sensitive, and subject to rollover risk. If Sri Lanka's credit markets tighten or LOFC's credit rating faces pressure from parent company instability, the Rs. 98.4 Bn borrowings create a liquidity vulnerability that did not exist in FY25. Tier 1 of 23.4% provides strong capital protection — but liquidity and solvency are different concepts.
▲ LOFC Red Flags (FY26)
Borrowings +527% in one year — systemic funding risk introduced suddenly.
Impairment reversal Rs. 630Mn vs Rs. 7.73Bn prior year — underlying credit quality reversal benefit has largely normalized.
Parent pressure risk — LOFC profits are the only real cash in the group; upstreaming to fund loss-making siblings is a governance concern.
● LOFC Green Flags (FY26)
PAT +9% — genuine, no accounting tricks, cash income.
NII +19% — core income engine running strong.
Gross loans +39% to Rs. 423 Bn — Sri Lanka's NBFI market share expanding.
Tier 1 23.42% — well above 10% regulatory minimum. Strong capital buffer.
Fee income +25% to Rs. 3.17 Bn — diversifying beyond interest income.
Net impairment reversal maintained — credit quality resilient.
§06
Sierra Cables: The group's genuine success story
SIRA · Revenue +73% · PAT +194%
SIRA.N0000
Sierra Cables PLC Cable manufacturer · Sri Lanka + East Africa subsidiary
POSITIVE — strong upgrade
Revenue FY26
Rs.15.97Bn
+73% vs Rs.9.26Bn
Gross Profit
Rs.3.98Bn
+70% YoY
GP Margin
24.9%
vs 25.3% FY25
Operating Profit
Rs.3.08Bn
+119% YoY
PAT
Rs.2.66Bn
+194% YoY
Admin Costs
Rs.416Mn
−18% (efficiency)
Finance Cost
Rs.923Mn
+40% (debt growth)
Op. CF (pre-WC)
Rs.3.68Bn
+85% cash quality
Sierra Cables is the unambiguous standout in the LOLC group this year. Revenue grew 73% to Rs. 15.97 Bn — not from accounting tricks, but from actual product sold and invoiced. Operating profit more than doubled. PAT nearly tripled to Rs. 2.66 Bn. Administrative cost efficiency improved (−18%) even as the business scaled. The operating cash flow pre-working capital at Rs. 3.68 Bn confirms earnings quality — the numbers are real. The US export story (UL44 certification for residential/commercial power cable) continues to compound: export share was <2% of revenue in FY24 and is now the primary growth driver behind the 73% topline jump.
Sierra Cables: 3-year growth trajectory
Revenue and PAT · Rs. Bn
Rev FY24
~Rs.6.5Bn est.
Rev FY25
Rs.9.26Bn
Rev FY26
Rs.15.97Bn +73%
PAT FY24
~Rs.0.3Bn
PAT FY25
Rs.0.90Bn
PAT FY26
Rs.2.66Bn +194%
Sierra: Earnings quality check
Operating CF pre-WC vs reported PAT · Rs. Bn
PAT FY26
Rs.2.66Bn
Op. CF FY26
Rs.3.68Bn ✓
✓ CF > PAT = clean earnings, no accounting magic
Compare: BIL and BRWN have CF << reported profit at operating level
◆ Sierra Cables — The Buried Gem
Sierra Cables sits 3 layers deep in the LOLC corporate structure (LOLC → BIL → BRWN → SIRA), making it invisible to most retail investors who look at the headline group numbers. Yet it is the only LOLC-group company where: (1) revenue growth is genuinely organic, (2) earnings quality is high (CF > PAT), (3) margins are stable and not dependent on fair-value gains, and (4) the growth driver — US exports via UL44 — is structural and defensible. The Rs. 2.66 Bn PAT is 11% of LOLC Holdings' total consolidated PAT of Rs. 23.4 Bn, from a company with a fraction of the group's assets.
§07
Africa: The Lipton integration reality check
Kenya · Tanzania · Rwanda · Sierra Leone
The April 2026 research identified the Lipton plantation acquisitions (Kenya, Tanzania, Rwanda) as the biggest question mark in the group — "if the integration works (big if)". FY26 results answer that question definitively: the Africa integration is struggling.
FY24/25 · Announced
LOLC acquires Lipton plantation estates in Kenya, Tanzania, Rwanda. Bargain-purchase gain of Rs. 54.5 Bn recognized. Management hails this as a world-leading tea play. The April 2026 analysis flagged: "Fail = goodwill impairment."
FY25/26 · Year 1 post-acquisition
Browns Plantations East Africa and Browns Plantations Tanzania Limited implement a Voluntary Retirement Plan. Non-recurring VRS costs: Rs. 1,792 Mn charged to group P&L. Workforce downsizing typically precedes — not follows — operational turnaround. This is the wrong sequence: fire workers before proving the business model works.
FY25/26 · Plantation financials
BRWN Group plantation segment: Revenue Rs. 63.6 Bn, Gross Profit Rs. 15.7 Bn (24.7% margin). These look reasonable — BUT the gross profit figure hides Rs. 5.83 Bn in biological asset fair-value gains (non-cash). Adjusted GP excluding bio-asset fair values is closer to Rs. 9.9 Bn. Financing costs allocated to the plantation segment would make operating profitability marginal to negative.
Prior year signal confirmed
April 2026 research explicitly flagged: "Sierra Leone Sugar (Sunbird) operated at negative EBITDA despite 60% crushing-volume growth, and Tropical Island Commodities booked another loss year." The FY26 restructuring confirms this was not a temporary dip but a structural problem.
Looking ahead
Management continues to hold the assets and has not disclosed any impairment. Under IFRS, if recoverable value falls below carrying amount, an impairment charge is mandatory. Given Rs. 169 Bn in "Right of use assets" and Rs. 28 Bn in bearer biological assets at BIL group level, any impairment of Africa plantation assets could run Rs. 10–30 Bn. This is the single largest latent risk in the LOLC group balance sheet.
��08
Financial crisis or default risk: the honest assessment
Is LOLC heading to a crisis?
Many investors who lost money in LOLC group stocks are asking the right question: is this group heading toward insolvency, default, or structural financial distress? Here is an honest, data-driven answer.
⚠ BIL: Elevated financial stress
Operating profit of Rs. 8.6 Bn covers only 24% of net finance costs of Rs. 35.2 Bn. The group is debt-servicing from capital, not earnings. NAV declined for the second consecutive year. No imminent default risk given asset base (Rs. 686 Bn assets vs Rs. 321 Bn liabilities), but trajectory is deteriorating. Interest Coverage Ratio: 0.24x — below any reasonable threshold.
🔴 BRWN: Deep structural loss
Rs. −27.1 Bn annual PAT. EPS −75.27. Without non-cash biological fair-value gains (Rs. 5.83 Bn), the loss deepens to Rs. −32.9 Bn. Operating profit (Rs. 8.95 Bn) is overwhelmed by finance costs. BRWN is not in imminent default but is in deep value destruction mode. Every year at this loss rate depletes equity by ~Rs. 27+ Bn.
✓ LOFC: Sound but watch closely
PAT Rs. 27.4 Bn, Tier 1 23.4%, deposits growing. No credit quality issues. The 527% borrowings jump is the only material risk. If wholesale markets close, LOFC must decelerate loan growth sharply. Capital adequacy provides buffer but not unlimited runway.
◆ LOLC Holdings: Moderate concern
Rs. 2.32 Trillion total assets, Rs. 654 Bn equity. Leverage is 3.5x — manageable for a diversified financial conglomerate. PAT decline is real but not existential. The risk is that LOFC (which generates real cash) is used to upstream capital to loss-making siblings, degrading the one genuinely healthy entity.
◆ Bottom Line: Not Imminent Crisis — But Structural Deterioration
The LOLC group does not face imminent default or insolvency risk based on FY26 data. The asset base is large (Rs. 2.32 Trillion), LOFC generates real cash (Rs. 27.4 Bn PAT), and capital adequacy ratios at the financial entities are strong.
However, the structural trajectory is deeply negative at the non-financial entities: BIL's debt interest bill exceeds operating profit by 4x, BRWN recorded a Rs. 27 Bn loss the moment bargain-purchase gains normalized, and Africa plantation restructuring signals the flagship acquisition thesis is failing.
The risk scenario that could trigger real distress: (1) LOFC faces a wholesale funding market closure requiring rapid deleveraging; (2) Africa plantation assets require Rs. 15–30 Bn impairment; (3) BIL's current-ratio-compressed liquidity creates a refinancing crunch as debt matures. None of these is certain — but all are plausible within 2–3 years if the trajectory continues.
§09
Updated relative rankings
Personal analytical view · not advice · vs April 2026
Ticker
Apr 2026 View
May 2026 View
Change
Key driver
SIRA.N0000
Positive
Positive ↑↑
Upgraded
PAT +194%, revenue +73%, cash-quality earnings confirmed
LOFC.N0000
Positive
Positive (watch)
Monitor
PAT +9% confirmed; borrowings +527% introduces new systemic risk
LOLC.N0000
Neutral
Cautious
Downgraded
PAT −43%, BRWN loss flowing up, Africa restructuring costs
EPS +152→−75 proves thesis. Loss deepening without accounting gains.
◆ For Investors Who Lost Money in This Group
The April 2026 research outlined exactly why the FY25 "profits" at BIL and BRWN were accounting artefacts — non-cash, non-recurring bargain-purchase gains. FY26 results have now confirmed this in the most direct way possible: remove the gains, and BRWN generates a Rs. 27 Bn annual loss. The April 2026 analysis identified the red flags before they manifested in reported results. The FY26 data makes those flags retroactively undeniable. Anyone who bought LOLC group stocks based on FY25 EPS multiples was pricing in artificial earnings. The FY26 results are the correction, not an aberration. Going forward: the only entity in this group with genuine earnings quality is LOFC, and even it now carries elevated wholesale funding risk. SIRA is a genuine growth story but small and 3 layers deep in the group structure.
§10
The accounting playbook — FY26 edition
Same tricks, new transactions
▲ Trick 01 — Persists & Escalates
Bargain Purchase / Acquisition Gains
Rs.98.7Bn
BIL FY26 · Up from Rs.63Bn FY25
New FY26 acquisitions: Tea Smallholder Factories (TSHF) 75.27% for Rs. 793Mn, FLMC Plantations 100% for Rs. 4.8Bn, plus fair-value uplifts on previously acquired Lipton estates. The gain is larger but EQUITY IS SMALLER — the ultimate proof these gains are not creating real wealth.
▲ Trick 02 — Confirmed
Biological Asset Fair-Value Gains
Rs.5.83Bn
BRWN FY26 · Non-cash P&L credit
Consumable biological assets (tea, rubber) revalued annually under IAS 41 — gains flow through P&L regardless of whether the crop has been harvested or sold. Without this Rs. 5.83 Bn credit, BRWN's FY26 loss deepens from Rs. −27.1 Bn to Rs. −32.9 Bn. Same accounting framework, now applied to the expanded Africa plantation portfolio.
▲ Trick 03 — Persists
Investment Property Revaluation
Annual
Investment properties Rs.108Bn at BIL · Rs.170Bn at BRWN
Investment properties carried at Rs. 108 Bn (BIL) and Rs. 170 Bn (BRWN) are revalued annually. Changes flow through P&L. With Sri Lanka's property market recovering post-crisis, these revaluations added positive P&L credits — but are non-cash and can reverse if the market turns.
◆ How to Screen LOLC Group Releases Going Forward
Three questions to ask every LOLC/BIL/BRWN earnings release: (1) What is "Results on acquisition of group investments" this period? Subtract it from PAT. (2) What is the "Change in fair value of consumable biological assets"? Subtract it. (3) What is "Change in fair value of investment properties"? Subtract it. If adjusted PAT is negative, the reported profit is accounting fiction. For FY26 BRWN: Rs. −27.1 Bn PAT − Rs. 2.28 Bn bargain purchase − Rs. 5.83 Bn biological = Rs. −35.2 Bn adjusted loss, vs Rs. +8.95 Bn operating profit. The Rs. 44+ Bn in finance costs is the underlying problem that no amount of fair-value accounting can permanently mask.