KUALA LUMPUR (Apr 8): LPI Capital Bhd’s net profit jumped 13% to RM57.2 million or 17.23 sen a share in the first quarter ended Mar 31, 2015 (1QFY15) from RM50.58 million or 15.28 sen a share a year ago, contributed mainly by the better results of its wholly-owned insurance subsidiary, Lonpac Insurance Bhd (Lonpac).

Revenue also increased 5% to RM291.73 million from RM277.8 million in 1QFY14.

In a statement today, LPI Capital (fundamental: 2.1; valuation: 1.65) said Lonpac reported pre-tax profit of RM53.3 million in 1QFY15, an improvement of 13.6% over RM46.9 million in 1QFY14.

"(Lonpac's) gross premium income increased by 5% to RM372.4 million from RM354.6 million registered in the previous corresponding quarter, while its net earned premium income also increased in tandem by 5.9% from RM135.9 million to RM143.9 million," it added.

The group’s chairman and founder Tan Sri Dr Teh Hong Piow said Lonpac registered a lower claims incurred ratio of 49.1% in 1QFY15, reduced from 50.8% in 1QFY14.

The unit's combined ratio also improved to 70.7% for the quarter under review compared with 75.8% a year ago, while its underwriting profit rose 28% to RM42.1 million from RM32.9 million.

“Globally, most countries are facing tough and unfavourable economic circumstances. In Malaysia, the challenging issues such as the implementation of the goods and services tax, low petroleum prices and lackluster property market are expected to be temporary and we believe that the Malaysian economy will achieve the targeted 4.5% to 5.5% of gross domestic product growth by year-end," said Teh.

"Facing these external economic weaknesses and intense competition, the group will continue to implement business innovation and improve its productivity and operational efficiency. We are optimistic that the group will see satisfactory growth in its overall operation and will enhance its shareholder value,” he added.

At midday break, LPI Capital shares rose 6 sen or 0.4% to RM14.88 on trades of 6,000 shares. Its market capitalisation stood at RM4.94 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.)