GENAC reports 1044% surge in six months net profit

Date: August 15, 2018 

General Accident Insurance Company Limited (GENAC) reported Net Premium Written of $839.89 million, a 25% increase from the $673.34 million reported in 2017. This increase was driven by a 2% increase in Gross Premium Written to $4.65 billion for the period, up from the $4.55 billion in 2017. In addition, Reinsurance ceded declined by 2% totaling $3.75 billion relative to $3.82 billion in 2017.  Excess of Loss Reinsurance Cost however remained the same at $53.57million (2017: $53.57 million).

Net Changes in Unearned Premiums for the period totaled $72.62 million, compared to $55.57 million that was recorded last year. This resulted in Net Premium Earned of $767.27 million for the period relative to $617.77 million in 2017, a 24% increase. Net premium earned for the quarter totaled $402.61 million, a 28% increase on the $313.71 million reported for 2017’s corresponding quarter.

Commission Income went up by 34% for the six months ended June 30, 2018, from $250.97 million in 2017 to $336.18 million, while Commission Expenses increased by 28% from $169.12 million to $216.18 million.

Claims Expenses saw a 5% decline, closing the period at $513.20 million (2017: $539.04 million), while Management Expenses rose 29% to total $352.44 million from $272.23 million in 2017.

As a result, GENAC reported an underwriting loss of $7.67 million for the period compared to a loss of $67.95 million in 2017.

Investment Income closed at $84.79 million, moving down 6% when compared with last year’s $90.45 million. Other Income however grew significantly to $58.32 million for the period relative to $3.41 million in 2017.

In addition, other operating expenses went up by 46% to total $20.90 million for the period relative to $14.33 million in 2017.

Profit before Taxation amounted to $114.53 million (2017: $11.58 million). Taxation for the period was $19.09 million (2017: $3.24 million). Consequently, Net Profit totaled $95.44 million relative to $8.34 million in 2017; representing a 1044% increase. Net profit for the quarter totaled $66.38 million, a 836% surge relative to $9.02 million reported in 2017.

As such, EPS for the period is $0.09 (2017: $0.01). The twelve month trailing EPS amounted to $0.30. The number of shares used in our calculations amounted to 1,031,250,000 units. GENAC’s stock price last traded at $3.68.

Balance Sheet Highlights:-

Total Assets increased by 11% to $6.23 billion as at June 30, 2018 from $5.62 billion a year ago. ‘Due from Policyholders, brokers and agents’ and ‘Investment Securities’ contributed to the overall rise to close the period at $789.21 million (2017: $559.09 million) and $2.09 billion (2017: $1.82 billion) respectively. ‘Cash & Short Term Investments’ however tempered the overall growth with a 45% decline to $64.28 million (2017: $1.18 billion).

Shareholder’s Equity as at June 30, 2018 stood at $2.02 billion (2017: $2.05 billion), resulting in book value per share of $1.96 (2017: $1.99).

Disclaimer:

Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. 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.

 

2018-08-15T21:38:46+00:00