AICL’s profits surge by 42% in CY21

February 9, 2022 (MLN): Adamjee Insurance Company Limited (AICL) has unveiled its financial results for the year ended December 31, 2021, as per which the company has posted its profit after tax of Rs2.94 billion (EPS: Rs8.43) i.e., 42% higher than the net profits of Rs2.08bn (EPS: Rs5.93) of the calendar year 2020, the company's filing on PSX showed on Wednesday.

In conjunction with financial results, the company announced a final cash dividend for the year ended December 31, 2021, at Rs1.50 per share i.e., 15%.

As per the financial statement, investment income that usually is the rescuer for the bottom-line of an insurance company increased by 38% to around Rs6bn, improving the net income of the company.

The underwriting results of the company which includes net insurance premium, insurance claims and acquisition expenses, management and other related expenses, went down by 39% YoY to Rs2.15bn.

During the period under review, the company witnessed Rs869mn net fair loss on financial assets that also affected the bottom line which has been somewhat offset by fair value adjustment to investment property that stood at Rs674mn in CY21.

The positive highlight includes Rs83mn rental income while the other income of the company inched down by 6% to Rs523mn.

Meanwhile, the financial cost of the company has soared by 2.7x during the review period to Rs53bn, affecting the financial health of the company. An increase in the policy rate by the central bank might be one of the reasons behind this increase in financial costs.

Notably, the primary culprit is increased tax expenses that restricted the bottom line. During CY21, tax expenses surged by 8.6times YoY, clocking in at Rs1.34bn.

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