KUALA LUMPUR (May 4): LPI Capital Bhd's net profit for the first quarter ended March 31, 2020 (1QFY20) rose slightly to RM77.92 million, from RM77.16 million, on the back of profit from the general insurance segment.

In a bourse filing today, LPI said revenue for the quarter was 2.9% higher year-on-year at RM403.9 million, versus RM392.7 million, on growth in gross earned premiums.

LPI said business operations in Malaysia contributed 96.2% of its total profit before tax for 1QFY20.

Earnings per share were 19.56 sen against 19.37 sen a year earlier.

In a separate statement, LPI founder and chairman Tan Sri Dr Teh Hong Piow said for 1QFY20, the group suffered a fair value loss of RM8 million in the statement of profit or loss mainly due to investments in unit trust funds, quoted equities and corporate bonds.

He said the fair value loss resulted mainly from depressed prices which in turn arose from the sell-off by foreign investors in both the equity and bond markets due to the Covid-19 pandemic and the crude oil price crash.

“We expect volatilities to persist in the next few months but we believe the markets will ultimately reflect the fundamentals of the investments when everything stabilises,” he said.

Meanwhile, Teh said LPI unit Lonpac Insurance Bhd managed to further expand its business in the first quarter of 2020 with gross premium income increasing by 5.4% to RM486 million, from RM460.9 million a year earlier, despite weak demand for insurance services.

“With the experience of operating under the unprecedented movement control order (MCO) period whereby Lonpac is required to provide essential financial services, the group will further review its digital transformation plan in order to create a more agile and digitally-enabled business that can support our business partners and customers in a more flexible way.

“The pandemic is having a considerable economic impact as consumer and business confidence is affected in the face of uncertainties.

“For general insurers, the impact on claims should be relatively manageable. In this challenging time for individuals and businesses, Lonpac is fully committed to its efforts to support our customers in their attempts to recover from this crisis,” he said.

At the midday break today, LPI Capital had dipped 0.61% or eight sen to RM12.98, with a market capitalisation of RM5.17 billion.