Tune Ins 2Q net profit up 12.5% on higher contributions from general insurance, general reinsurance segments



-A +A

KUALA LUMPUR (Aug 18): Tune Ins Holdings Bhd posted a 12.5% increase in net profit for the second quarter ended June 30, 2015 (2QFY15) at RM16.14 million or 2.15 sen per share. 

The underwriter for the general and life insurance registered a net profit of RM14.35 million or 1.91 sen per share a year ago. 

Tune Ins attributed the better earnings to the increases in pre-tax profit (PBT) of RM4.9 million in general insurance and RM400,000 in general reinsurance respectively, offset by higher management expenses. 

Revenue for 2QFY15 was up 13.5% at RM115.25 million compared with RM101.51 million in 2QFY14. 

No dividend was declared for the current quarter under review. 

Tune Ins' net profit for the cumulative six months (1HFY15), however, was down 2.9% to RM32.62 million or 4.34 sen a share from RM33.59 million or 4.47 sen a share in 1HFY14. 

This is despite revenue for the period growing 5.1% to RM226.5 million from RM215.46 million in 1HFY14. 

The decline in net income was due to higher management expenses of RM6 million, offset by an increase of RM800,000 in PBT from general reinsurance and RM700,000 in share of profit from associates in Thailand. 

In a statement today, Tune Ins chief executive officer Junior Cho said with the group's continued expansion into new markets, introduction of new products and new distribution channels, its gross written premium (GWP) for 1HFY15 grew by 24%. 

"Despite slower trade activity in emerging Asia-Pacific markets, demand for connectivity remains robust.

"Airports Council International (ACI) reported that global passenger traffic increased by 4.2% year-on-year for the month of June with Asia-Pacific airports reporting an overall growth in passenger traffic of 8.3% for 1HFY15," said Cho. 

He added that the travel climate in Malaysia and Thailand is still registering a steady growth trend where the group will continue to see strong contribution from their partners. 

"In 2QFY15, GWP jumped 31.9% backed by growth in key markets. Net Earned Premium (NEP) recorded a steady increase of 15.8% driven by continuous growth in the top line," Cho noted.

Going forward, the group expects its Middle East joint venture to continue to grow with the activation of offline agents and new distribution channels in the Middle Eastern markets.

"Thailand affiliates are also expected to post higher profit contributions as their businesses grow in the coming month," the group said.

As part of the Asean expansion, Tune Ins has embarked on its acquisition of a 50%+1 share stake in an Indonesian general insurer, which is pending regulatory approval. 

The acquisition is expected to be completed some time in the next three months. 

In addition, the group also continues to strengthen its digital channel for broader consumer access. 

"Notwithstanding the recent political developments, economic situation and currency volatility in the region, we are confident that our second half performance will continue with a similar growth trend based on our current business pipeline and forward sales," the group added. 

Shares in Tune Ins (fundamental: 1.8; valuation: 1.2) fell one sen or 0.76% to close at RM1.31 today, for a market capitalisation of RM984.81 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.)