GENAC reports 17% decrease in six months net profits

August 17, 2020

GENAC for the six months ended June 30, 2020, reported Gross premium written of $6.21 billion, 5% lower than the $6.56 billion reported for 2020. Reinsurance ceded fell 11% to close at $4.84 billion relative to $5.45 billion booked in 2019. Excess of loss reinsurance trended upwards by 16% to $78.64 million (2019: $67.73 million).

As a result, net premium written increased by 24% from $1.05 billion last year to $1.30 billion. Net premium written improved 21% within the second quarter to $609.57 million (2019: $505.75 million).

Net changes in earned premiums totalled $56.35 million, relative to changes in unearned premiums of $60.16 million recorded last year. Consequently, net premiums earned for the six months period grew by 37% to a total of $1.36 billion compared to $988.67 million for the prior year. While net premiums earned for the quarter increased by 36% to a total of $684.74 million (2019: $503.31 million).

Commission income fell by 8%, year over year, from $406.04 million in 2019 to $373.22 million in 2020, while commission expenses decreased by 3% from $259.65 million in 2019 to $250.82 million for the six months period.

Claims expenses saw an increase of 40%, closing the six months period at $887.30 million (2019: $632.83 million), while management expenses climbed by 36% to total $570.55 million compared to 2019’s total of $419.14 million.

Underwriting profit for the six months totalled of $21.22 million, this compares to an underwriting profit of $80.97 million booked in 2019. While for the quarter, underwriting loss totaled $21.61 million in comparison to a profit of $39.16 million in 2019.

Investment income closed at $89.68 million, a 13% improvement when compared with last year’s corresponding total of $79.07 million, while other income totalled $81.03 million for the period, relative to an income of $38.25 million in 2019. Other operating expenses grew by 44% to $46.81 million relative to $32.51 million in 2019.

Profit before taxation amounted to $142.41 million (2019: $163.56 million). Following taxes of $29.92 million (2019: $28.28 million). Net profit totalled $112.49 million for the period, a decrease of 17% compared to the $135.28 million reported last year. While net profit for the quarter totaled $37.77 million, compared to the $104.41 million reported last year. Net profit attributable to shareholders amounted to $129.91 million (2019: $135.28 million). While net profit attributable to shareholders for the quarter closed at $53.86 million (2019: $104.41 million).

Total comprehensive income year to date amounted to $45.47 million (2019: $131.29 million) for the period ended June 30, 2020. While total comprehensive loss for the quarter booked $22.88 million versus an income of $133.67 million in 2019.

As such, earning per share (EPS) for the period amounted to $0.13 (2019: $0.13) while EPS for the quarter amounted to $0.05 (2019: $0.10). The trailing twelve months EPS amounted to $0.61. The number of shares used in our calculations amounted to 1,031,250,000 units. The stock traded at $6.53 as at August 17, 2020.

Balance Sheet at a glance:- 

Total Assets increased by 40% to $11 billion as at June 30, 2020 from $7.86 billion a year earlier. ‘Investment Securities’ contributed to the growth in assets with a 49% increase to $4.04 billion relative to $3.10 billion in 2019.  ‘Investment properties’ also contributed to the increase with a 159% growth year over year to close at $543.33 million (2019: $209.68 million).

Shareholder’s Equity as at June 30, 2020 stood at $2.63 billion (2019: $2.19 billion) resulting in book value per share of $2.55 (2019: $2.12).

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