EFUG’s profitability surges by 2.3 times YoY on increased investment income

MG News | August 24, 2020 at 11:03 AM GMT+05:00

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August 24, 2020 (MLN): EFU General Insurance Limited (EFUG) has unveiled its financial results for the 1HCY20 ended June 30, 2020, as per which the company has posted its profit after tax of Rs 1.53 billion (EPS: Rs 5.84) i.e. around 2.3 times higher than the net profits of Rs 646 million (EPS: Rs 2.05) of the corresponding period last year.

The financial results announced today were also accompanied by the second interim cash dividend for the six months ended June 30, 2020, at Rs 1.5 per share i.e. 15%.

As per the financial statement issued by the company, the increase in profitability of the company was attributable to an increase in investment income which went up by 32% YoY to Rs 6.82 billion and a net fair gain on financial assets of Rs 2.04 billion.

The company reported a loss in underwriting income of Rs 7.88 billion due to a decline in the company’s net insurance premium by 5.43% YoY along with an increase in net insurance liabilities by 5 times YoY, despite a decline in insurance claims and acquisition expenses by 10% YoY.

During the period, the rental income jumped by 17.7% YoY to Rs 62 million. On the other hand, other income plunged by 21.5% YoY to stand at Rs 120 million.

Meanwhile, the tax expenses of the company went up by 12% YoY to Rs 900 million.

Profit and Loss Account for the Half-Year ended June 30, 2020 (Rupees in '000)
	Jun-20	Jun-19	% Change
Net insurance premium	17487834	18491395	-5.43%
Net insurance claims	-8914394	-9635655	-7.49%
Net commission and other acquisition costs	-3179259	-3814275	-16.65%
Insurance claims and acquisition expenses	-12093653	-13449930	-10.08%
Management expenses	-2256936	-2279340	-0.98%
Net change in insurance liabilities (other than outstanding claims)	-11018887	-2171030	407.54%
Underwriting result	-7881642	591095	-1433.40%
Investment income	6823590	5168257	32.03%
Net realized fair value gain/(losses) on financial assets	1222820	-5567340	-
Net fair value gain / (loss) on financial assets at fair value through profit and loss	2047474	1019971	-
Rental income	62812	53351	17.73%
Other income	120830	153915	-21.50%
Other expenses	-71281	-58027	22.84%
	10206245	770127	1225.27%
Results of operating activities	2324603	1361222	70.77%
Profit from window takaful operations - Operator's Fund	108185	88216	22.64%
Profit before tax	2432788	1449438	67.84%
Income tax expense	-900409	-803005	12.13%
Profit after tax	1,532,379.00	646,433.00	137.05%
Profit attributable to:
Equity holders of the parent	1168090	410902	184.27%
Non-controlling interest	364289	235531	54.67%
	1532379	646433	137.05%
Earnings (after tax) per share - Rupees	5.84	2.05	184.88%

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