PETALING JAYA: Insurer LPI Capital Bhd posted a 3% climb in net profit to RM86.6mil for the fourth quarter ended Dec 31, from RM84mil a year earlier despite a challenging environment.
In a filing with Bursa Malaysia yesterday, the company said its revenue for the quarter rose more than 2.6% to RM399.3mil, compared with RM389mil previously.
LPI attributed the improvement in its topline and bottomline to higher premiums from its general insurance segment.
Its founder and chairman Tan Sri Teh Hong Piow said he expected that this year will remain challenging for the general insurance industry due to the weak market sentiment, underpinned by ongoing market volatilities and rising macro uncertainties.
“However, the strong focus by the government in its 2020 budget on development expenditure to support growth and improve sentiments will hopefully bring positive spillover effect to the various economic sectors while finalisation of the on-going US-China trade talks will help lead towards the stabilisation of global macroeconomic conditions.
“Amidst the volatile environment, LPI Group will continue to strengthen its distribution channels, maintain sound underwriting practices and exercise prudential risk management with the aim to achieve a sustainable profit growth, ” he said in a statement.
Cumulatively, for the whole year of financial year 2019, LPI posted a 2.6% increase in net profit to RM322.4mil compared to RM314.1mil a year earlier, on the back of higher revenue growth of 5.9% to RM1.6bil from RM1.5bil previously.
Teh said in 2019, LPI’s subsidiary Lonpac Insurance Bhd had increased its premium base despite a slower demand experienced in the general insurance industry.
“It managed to expand its gross premium income by 3.7% from RM1.47bil reported in the previous due to rising medical costs and increased frequency of claims.financial year to RM1.52bil, while its net earned premium income for the 12 months period registered a stronger growth of 8.7% to RM1.01bil, ” he said.
He pointed out that Lonpac’s claims incurred ratio had climbed to 43.9% from 40.9% previously due to rising medical costs and increased frequency of claims.
LPI announced dividend payout of 70 sen per share for 2019, higher compared to 68 sen it declared in 2018 thanks to an improvement in performance.
LPI’s net return on equity for the 2019 under review improved to 16.3% from 14.6%, while its earnings per share increased to 80.92 sen from 78.83 sen previously.
The group generated almost 98% of its profits from its operation in Malaysia. Its general insurance segment accounted for 76% of the group’s total assets.
As at Dec 31,2019, LPI said its total asset decreased by RM194.7mil to RM4.05bil from RM4.24bil a year earlier due to lower market value of quoted equity investment designated as fair value through other comprehensive income, and offset by the recognition of right-of-use assets upon the adoption of accounting standards.
Yesterday, shares of LPI closed slightly lower to RM14.80 apiece.
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