LPI Capital 2Q net profit jumps 68%, pays 20 sen dividend

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KUALA LUMPUR (July 8): LPI Capital Bhd saw its net profit jump 67.5% to RM85.74 million or 25.82 sen per share for the second quarter ended June 30, 2015 (2QFY15) from RM51.18 million or 15.47 sen per share a year ago, on higher contribution from its insurance arm, Lonpac Insurance Bhd and the realisation of gains of its investment in equities.

Revenue for 2QFY15 climbed 4.5% to RM304.73 million from RM291.49 million in 2QFY14.

LPI Capital also declared a first interim dividend of 20 sen per share amounting to RM66.4 million for the financial year ending Dec 31, 2015 (FY15), payable on Aug 3, 2015.

In a filing with Bursa Malaysia today, the group said its net profit for the quarter was boosted by a gain of RM39.2 million on the disposal of investment in equities by its investment holding division.

“The increase in revenue of the general insurance segment was mainly contributed by higher gross earned premium for the quarter which registered a growth of RM11.4 million or 4% to RM293.4 million,” it added.

For the half-year period (1HFY15), LPI Capital's net profit rose 40.5% to RM142.94 million or 43.05 sen a share from RM101.76 million or 30.75 sen a share in 1HFY14, while revenue rose 4.8% to RM596.46 million from RM569.29 million a year ago.

In a separate statement, LPI Capital founder and chairman Tan Sri Teh Hong Piow said the recovery of the US and other developed economies has been disappointing so far as it has not generated as strong as expected a recovery in the export of manufactured goods from Asia.

"Data in China in the recent weeks showed that China’s economy is beginning to stabilise. However, the concern is whether this stabilisation is sustainable.

"Greece and the Eurozone are urgently trying to contain a full blown financial crisis of mounting debt woes and capital outflows, potentially threatening Greece’s exit from the eurozone," he said, adding that Malaysia is not shielded from the impact of such external headwinds.

"As a major trading nation, we are exposed to the volatility of the world economy and its resultant effects may create a heavy drag on our economy," Teh warned.

On its part, Teh said LPI Capital will continue to exercise prudent underwriting and claims management amid a turbulent economic environment and with the anticipated slower growth in the general insurance industry.

“With our risk management practices together with our business strategies, we are confident that the group will continue to improve on its performance for the challenging second half year of 2015,” he added.

As at 2.15pm, LPI (fundamental: 2.1; valuation: 1.65) shares were unchanged at RM14.02. Its market share stood at RM4.65 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)