August 17, 2023

General Accident Insurance Co. Ja. Ltd. (GENAC) for the six months ended June 30, 2023 reported a 36% increase in insurance revenue totalling $5.26 billion compared to $3.88 billion in the corresponding period last year. Insurance revenue for the Second quarter had a 33% increase to close at $2.37 billion compared to $1.78 billion for the comparable quarter of 2022.

Insurance Service Expenses amounted to $2.20 billion (2022: $1.96 billion), this represents an increase of 13% year over year. Consequently, net expenses from reinsurance contracts held increased by 51% to $2.73 billion compared to $1.82 billion for the Six months ended June 30, 2022. The company booked net expenses from reinsurance contracts held of $1.06 billion for the second quarter versus $746.30 million reported for the similar quarter of 2022.

Insurance service result increased by 194% to close at $323.42 million (2022: $110.02 million), while Net investment income decreased by 10% from $146.05 million in 2022 to $131.68 million in the period under review. As a result, net premium and investment result for the Six months ended June 30, 2023 amounted to $455.10 million, a 78% increase relative to $256.07 million reported in 2022.

Other Income for the Six months ended June 30, 2023, amounted to $33.79 million, a 1197% increase relative to $2.61 million reported in 2022. Other expense for the Second quarter amounted to $12.24 million (2022: $51.25 million). Other Operating Expenses totalled $183.30 million a 9% increase from the corresponding period last year. (2022: $168.94 million).

Profit before taxation for the Six months ended June 30, 2023, amounted to $305.59 million, a 241% increase relative to $89.73 million reported in 2022. Profit before taxation for the Second quarter amounted to $248.84 million (2022: $91.55 million).

Taxation for the Six months ended June 30, 2023 had a 21% increase to reach $59.26 million (2022: $48.98 million). As such, Net Profit for the year for the Six months amounted to $246.33 million, a 504% increase from the $40.75 million reported in 2022. For the Second quarter, Net Profit for the year was $192.83 million (2022: $44.53 million).

Unrealised gains on FVOCI investments for the Six months ended June 30, 2023 grew to $6.09 million (2022: losses of $8.40 million). For the Second quarter, Unrealised losses on FVOCI investments totalled $60.06 million (2022: $29.12 million).

Foreign currency translation reserve decreased by 77% to $8.02 million (2022: $35.15 million). Foreign currency translation reserve for the quarter totalled $1.05 million relative to gains of $4.39 million booked in the prior year’s quarter.

Total Comprehensive income for the period totalled $260.44 million, relative to the $67.51 million reported twelve months prior. For the quarter, Total Comprehensive income amounted to $131.72 million compared to the $19.80 million reported in 2022.

Total Comprehensive income attributable to owners of the company for the period totalled $234.83 million versus $91.32 million reported twelve months prior. For the quarter, Total Comprehensive income attributable to owners of the company amounted to $105.20 million compared to the loss of $8.48 million reported in 2022.

Consequently, Earnings Per Share for the Six months amounted to $0.22 (2022: EPS: $0.07), while Earnings Per Share for the quarter totalled $0.16 (2022: EPS: $0.05). The twelve-month trailing EPS was $0.78 and the number of shares used in these calculations was 1,031,250,000.

Notably, GENAC’s stock price closed the trading period on August 16, 2023 at a price of $4.50 with a corresponding P/E ratio of 5.78x.

Balance Sheet Highlights

The company’s assets totalled $9.42 billion (2022: $8.67 billion). The 9% increase in total assets was primarily due to ‘Reinsurance Contract Assets’ growing $673.37 million to close $1.74 billion versus $1.06 billion reported in 2022.

Shareholder’s equity was $3.12 billion (2022: $2.69 billion), representing a book value per share of $3.02 (2022: $2.61).

Disclaimer:

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.