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AICL’s profits jump by 64% YoY as insurance claims decline

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August 24, 2020 (MLN): Adamjee Insurance Company Limited (AICL) has observed 64.28% YoY increase in net profits to Rs 903.5 million for the half year ended on June 30th, 2020. In the corresponding period last year, the company posted net profits of Rs 549.97 million.

This has reflected in company’s earnings per share which grew by 70% YoY from Rs 1.51 to Rs 2.57.

Alongside financial results, the company announced an interim cash dividend of Rs 1.25 per share i.e. 12.5%.

During the period, the Net insurance premium of the company increased negligibly by 0.62% YoY mainly due to lockdown induced decline in economic growth and car sales in Pakistan and UAE, a report by Foundation Securities highlighted.

Net Insurance Claims went down by 9.8% YoY as low mobility on roads due to strict lockdown imposed by both Pakistan and UAE would lead to fewer damages, restricting the claims ratio of the segment, the report added.

Furthermore, the Investment Income of the company increased by 11.67% YoY, according to the report, Dividend from MCB is the main contributor to overall investment income.

Rental Income of the company jumped from Rs 3.18 million to Rs 32.47 million. Up by 918.4% YoY owing to recently acquired office building in Karachi and renovated office in Lahore that allow some floors to be available for rent.

In addition to this, profit from Window Takaful showed a growth of 50.4% YoY.

 

Consolidated Profit and Loss account for the half year ended June 30th, 2020 ('000 Rupees)

 

Jun-20

Jun-19

% Change

Net insurance premium

 12,901,524

 12,822,478

0.62%

Net insurance claims

 (6,927,298)

 (7,679,840)

-9.80%

Net commission and other acquisition cost

 (2,035,708)

 (1,955,646)

4.09%

Insurance claims and acquisition expenses

 (8,963,006)

 (9,635,486)

-6.98%

Management expenses

 (1,889,761)

 (2,208,494)

-14.43%

Net change in insurance liabilities

 (1,516,943)

 (267,489)

Underwriting result

 531,814

 711,009

Investment income

 1,972,077

 1,765,985

11.67%

Net fair value loss on financial assets at fair value through profit or loss

 (1,444,546)

 (1,631,530)

Net realized gains on investment property

 (21,000)

 21,000

Rental income

 32,477

 3,189

918.41%

Other income

 271,521

 174,041

56.01%

Other expenses

 (40,825)

 (73,495)

-44.45%

Results of operating activities

 1,301,518

 970,199

34.15%

Finance cost

 (5,955)

 (12,887)

-53.79%

Profit/(loss) from Window Takaful Operations

 87,036

 57,859

50.43%

Profit before tax

 1,382,599

 1,015,171

36.19%

Income tax expense

 (479,096)

 (465,194)

2.99%

Profit after tax

 903,503

 549,977

64.28%

Basic and diluted earnings per share – Rupees

 2.57

 1.51

70.20%

 

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Posted on: 2020-08-24T16:44:00+05:00

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