KUALA LUMPUR (April 14): LPI Capital Bhd posted a lower net profit of RM61.53 million for the first quarter ended March 31, 2022 (1QFY22), down 25.25% from RM82.31 million a year earlier. 

Lower investment income and profitability of its wholly-owned insurance subsidiary Lonpac Insurance Bhd contributed to the group's lower profit, according to its filing with the local bourse. 

Earnings per share fell to 15.44 sen from 20.66 sen a year earlier. 

Quarterly revenue fell 9.77% to RM397.74 million from RM440.79 million, mainly due to a 7.2% or RM28.5 million decline in gross earned premiums in the general insurance segment.

On a quarterly basis, net profit declined by 15.79% from RM73.07 million for 4QFY21, while revenue declined by 7.26% from RM429.04 million. 

According to the group’s chairman Tan Sri Dr Teh Hong Piow, Lonpac's profitability in 1QFY22 was partly affected by the additional cost of RM6.4 million incurred for the reinstatement of reinsurance as a result of last December’s major flood event. In addition, the result was also affected by an increase in technical reserves. 

Looking ahead, he said demand for insurance is expected to increase as the economy recovers and business activities resume.

“Though the LPI group faced some headwinds in its performance in 1QFY22, the group is confident that with its strengthened distribution channel and concerted efforts in executing its business plan, LPI will be able to report a satisfactory performance for the remainder of FY22,” he added. 

Through its subsidiaries, LPI underwrites all classes of general insurance, which includes fire, auto, and marine insurance. The company also provides financing of lease services.

At the midday break on Thursday (April 14), LPI shares had risen two sen or 0.14% to settle at RM14.20, giving the company a market capitalisation of RM5.66 billion.