PETALING JAYA: LPI Capital Bhd has recorded earnings of RM82.31mil in the first quarter ended March 31,2021 (Q1), an improvement of 5.6% over RM77.92mil in the same quarter last year on the back of an increase in dividend income from equity investment.
It said in a statement that revenue grew 9.1% to RM440.8mil in the quarter.
Earnings per share improved 5.6% to 20.66 sen from 19.56 sen in the comparative quarter.
For the quarter under review, the group’s insurance arm Lonpac Insurance Bhd reported a fair value loss of RM34.6mil in its fixed income unit trust investments as compared to a RM6.2mil fair value loss in the previous corresponding quarter.
Its pre-tax profit was 11.7% lower at RM707mil versus RM80.1mil in the year-ago quarter.
According to group chairman Tan Sri Teh Hong Piow, the unit was affected by the recent surge in bond yields, which resulted in lower bond valuations.
“We believe the fixed income unit trust investment is still a viable investment in the long term and the valuation will be adjusted once the yields return to normal, ” he added.
Meanwhile, the restrictions of MCO 2.0 affected the group’s business development initiatives.
Lonpac reported a 3.1% lower gross premium income of RM470.7mil for the quarter as compared to RM486mil registered in the previous corresponding period.
“Both direct/corporate clients and broking channels reported a drop in gross premium income for the quarter, ” said Teh.
However, Lonpac’s net earned premium income grew 6.5% to RM252.2mil from RM237.1mil, owing partly to some release of unearned premium reserve.
The unit’s underwriting profit increased 34.8% to RM92.2mil in the quarter, partly owing to a lower claims incurred ratio of 39% as compared to 46.3% previously.
With management expenses at 19.7% of net earned premium and a commission ratio at 4.8%, Lonpac’s combined ratio which measures the profitability of its underwriting operation, registered a commendable 63.5% as compared to 71.2% recorded previously.