KUALA LUMPUR (May 29): MNRB Holdings Bhd saw its net profit growing 2.9% on-year to RM76.9 million or 36.1 sen per share in the fourth quarter ended March 31, 2015 (4QFY15), against RM74.73 million or 35.1 sen previously, on higher investment and commission incomes, as well as realised gains.
The amount achieved in 4QFY15 is the highest quarterly net profit that the company has recorded in the past five years.
In a filing with Bursa Malaysia, MNRB Holdings (fundamental: 0.4; valuation: 2.55) posted a 6.36% increase in revenue to RM628.61 million in 4QFY15, compared to RM591 million in the previous corresponding quarter.
Full year net profit, however, slipped 21.43% to RM122.57 million or 59.9 sen per share, against RM156 million or 73.2 sen per share the year before. Revenue decreased 0.42% to RM2.38 billion, compared to RM2.39 billion a year ago.
In a statement, MNRB Holdings said the slight dip in revenue was registered despite provisions which the group had made for a few large claims that affected its reinsurance, takaful and retakaful subsidiaries, including losses from the MH17 tragedy in Ukraine and claims from the floods that hit the East Coast of Peninsular Malaysia end last year.
The increase in provision for claim liabilities of the general retakaful fund during FY15, contributed to the higher loss of RM17.7 million, as compared to a loss of RM1.2 million last year.
MNRB said the bulk of its revenue in FY15 was contributed by its reinsurance subsidiary, Malaysian Reinsurance Bhd, which registered revenue of RM1.4 billion, a decrease of 2% from RM1.44 billion last year, due to the lower gross premiums as a result of the reduction in the level of voluntary cessions.
Malaysian Reinsurance overseas portfolio contributed 41% of total gross premiums, as compared to its 38% contribution last year.
Gross premiums from the Middle East and North Africa region (MENA), underwritten by the group’s subsidiary Malaysian Reinsurance (Dubai) Ltd, registered a growth of 10% year-on-year (y-o-y).
MNRB’s takaful arm registered a 20.1% increase in net profit to RM19.4 million, as compared to RM16.1 million last year, while its revenue rose 8.8% to RM927.2 million in FY15, as compared to RM852.5 million in FY14.
MNRB Holdings' chief executive officer Mohd Din Merican said the company is on track to achieve an equal contribution in gross premiums from its overseas and local portfolio, for the financial year ending March 31, 2017.
The company said despite losses reported in its retakaful segment, it remains positive in the large untapped retakaful business.
“Foreseeing the promising growth and opportunities in the retakaful market, MNRB Holdings had last month announced that Malaysian Retakaful has been granted approval by Bank Negara to conduct general and family retakaful business,” the statement read.
“Following this, MNRB Holdings had also announced its plans to undertake an internal restructuring exercise for its retakaful business, the details of which is expected to be finalised soon.”
MNRB Holdings share price closed 12 sen or 3.31% higher at RM3.75 today, for a market capitalisation of RM773.4 million.
(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.)