Friday 29 Mar 2024
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KUALA LUMPUR (Feb 6): LPI Capital Bhd saw its net profit fall 20.3% to RM81.45 million or 24.53 sen a share in the fourth quarter ended Dec 31, 2016 (4QFY16) from RM102.21 million or 30.79 sen a share a year ago, mainly due to the absence of a one-off significant gain of RM36.9 million on disposal of investment in 4QFY15 from the investment holding segment.

Revenue, however, rose 5% to RM355.55 million in 4QFY16 from RM338.62 million in 4QFY15.

It also declared a second interim dividend of 55 sen per share, amounting to RM165.99 million, for the financial year ended Dec 31, 2016 (FY16), payable on March 2. This brings total dividend payment for FY16 to RM265.6 million, a 14.3% increase from FY15's payout of RM232.4 million.

In a filing with Bursa Malaysia today, LPI said its general insurance segment registered a profit growth of 18.5% to RM105.7 million in 4QFY16 from RM89.2 million in 4QFY15, while underwriting profit for the quarter rose by 19.9% to RM91.1 million from RM76 million previously.

For the full year, LPI's net profit grew 36.2% to RM437.22 million or 131.7 sen a share from RM321 million or 96.69 sen a share in the previous year, on higher gain from realisation of equity investment, as well as better underwriting performance from its wholly-owned insurance subsidiary Lonpac Insurance Bhd.

Revenue also increased 7.3% to RM1.38 billion from RM1.28 billion in FY15, largely contributed by the general insurance segment which rose 7.4%.

"Lonpac performed well, as reflected in its impressive 17.4% growth in pre-tax profit to RM336.7 million (in FY16) from RM286.7 million reported in FY15," LPI founder and chairman Tan Sri Dr Teh Hong Piow said in a separate statement today.

"Its earned premium also grew by 8.5% to RM767.3 million from RM706.9 million, although its gross premium growth weakened to 2.2% to reach RM1.28 billion from RM1.25 billion," said Teh.

Lonpac's claim incurred ratio fell to 38.3% from 41% and boosted its underwriting profit by 17.9% to RM278.5 million from RM236.3 million in FY15.

Going forward, Teh said after a challenging 2016, growth prospect for the global economy in 2017 remains uncertain, bogged down by a few lingering unresolved issues shaping up the global economic arena.

"These include the trade policies of the newly-inaugurated US President and their effects on the United States and the rest of the world are still unpredictable, the result of Brexit is still unclear, lower oil prices is still in the backdrop, the slowdown in advanced economies persists and China's rebalancing continues," he said.

"On the local front, 2017 will be another challenging year and with the detariffication of motor insurance, we expect to see keener competition in motor business, which may have a detrimental impact on our underwriting performance.

"However, with our robust capital position and strong distribution capability, we are prepared to face these challenges with cautious optimism," Teh added.

LPI shares closed the morning session up 6 sen or 0.35% at RM17.24 today, with 5,500 shares done. Its market capitalisation stood at RM5.72 billion.

 

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