Adamjee Insurance (AICL): 4Q2018 LPS of Rs0.6 vs LPS of Rs1.5 in 4Q2017; DPS Rs 1.5/share (Below expectations)
- AICL declared 4Q2018 LPS of Rs0.6 which was lower than expectations largely driven by underwriting losses. The company registered underwriting loss of Rs273mn in 4Q2018 as against underwriting income of Rs112mn in same period last year.
- Losses in underwriting business was mainly due to sharp growth in claims expense that rose by 46% to Rs4.4bn in 4Q2018. Net premiums of the company on the other hand remained flat at Rs7.7bn during the period under review. Consequently, claims ratio increased to 58% YoY in 4Q2018 vs. 39% in 4Q2017. We await for management comment on factors behind higher claims ratio.
- The company booked Net investment loss of Rs16mn during 4Q2018 as against Rs776mn in same period last year. This accounts for fair value loss on financial assets as Insurance companies are now required to book investments on fair value basis.
- In 2018, AICL announced EPS of Rs3.7, up 17% YoY. Underwriting income of the company was down 27% YoY to Rs558mn as premiums were up 7% in contrast to claims that were up 25%. Investment Income of the company increased by 34% YoY to Rs1.4bn.
- Key risks for the stock includes 1) slowdown in insurance business, 2) fall in equity markets and 3) deterioration of Pakistan macros.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.