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MNRB’s 2Q net profit decreases 64%, hit by higher claims, expenses and higher loss from fair value and associates

2022-11-25T11:25:38+08:00November 25th, 2022|0 Comments

KUALA LUMPUR (Nov 25): MNRB Holdings Bhd saw its net profit decline by 63.91% to RM14.01 million in the second quarter ended Sept 30, 2022 (2QFY2023), from RM38.83 million a year ago, despite higher revenue during the quarter under review.

MNRB’s 2QFY2023 net profit was dragged by higher gross claims incurred, together with higher fair value losses, a higher share of loss from associates and increase in management expenses, finance costs and operating expenses, the insurer’s Bursa Malaysia filing showed.

Its gross claims and benefits paid jumped 40.54% to RM475.3 million in 2QFY2023, from RM338.18 million a year ago.

Fair value loss swelled nearly seven times to RM13.73 million, from RM1.9 million during the same period and the share of loss from associates widened to RM5.81 million from RM2.18 million.

Management expenses increased 51.09% to RM92.33 million from RM61.11 million, while finance costs rose 4.79% to RM4.34 million from RM4.2 million a year before.

Other operating expenses also jumped 21% to RM2.17 million from RM1.79 million a year before.

As a result, its earnings per share dropped to 1.8 sen in 2QFY2023, from five sen in 2QFY2022.

Quarterly revenue, however, rose 19.95% to RM875.67 million, from RM730.04 million a year before, contributed by higher gross premiums/contributions generated by the reinsurance and takaful subsidiaries.

Nonetheless, its net profit improved compared to the immediate preceding quarter (1QFY2023), when it sank into the red with a net loss of RM13.28 million, on the improved operating performance of the reinsurance and takaful subsidiaries.

For the cumulative six months ended Sept 30, 2022 (6MFY2023), its net profit tumbled to just RM736,000, a whopping 99.14% drop from the RM85.41 million recorded a year ago, as higher net claims and benefits, other expenses as well as share of losses of associates eats into its margin.

This was despite the group’s revenue rising 16.66% to RM1.72 billion from RM1.47 billion a year prior due to higher gross premiums/contributions generated by the reinsurance and takaful subsidiaries.

The group is optimistic that its strategic initiatives will continue to produce strong growth in revenue as evidenced in the first half of the financial year whilst continuing to add value to its customers and other stakeholders in 2022.

Shares in MNRB closed up 0.5 sen or 0.56% to 89 sen, giving the group a market capitalisation of RM697 million. Since the beginning of this year, the stock has fallen 22% from RM1.14 on Jan 3, 2022.

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