LPI Capital 1Q Pre-Tax Profit Dips Due Lower Contribution From Lonpac Insurance

LPI Capital Bhd reported a Profit Before Tax of RM75.8 million, 22.7% lower as compared to RM98.1 million registered in the previous corresponding quarter (1Q2021).

It said that Lower investment income and reduced profitability of its wholly-owned insurance subsidiary, Lonpac Insurance Bhd (Lonpac), contributed to LPI’s lower profit.

For the quarter under review, the Group reported an Investment Income of RM28.7 million, 33.7% lower than the RM43.3 million recorded in 1Q2021.

It said that The lower Investment Income was due mainly to lower dividend income received from the Group’s equity investments. Net Profit Attributable to Shareholders registered RM61.5 million, 25.3% lower than RM82.3 million achieved in 1Q2021.

Net Return on Equity was reported at 2.9% while Earnings Per Share dropped 25.3% to 15.44 sen from 20.66 sen. Revenue of the Group came in at RM397.7 million, 9.8% lower as compared to RM440.8 million in the corresponding quarter in the previous year due mainly to lower Gross Earned Premium booked in 1Q2022.”

Reviewing the performance of LPI Capital Bhd (LPI) for the 1st Quarter of 2022, Group Chairman Tan Sri Dato’ Sri Dr Teh Hong Piow commented in a statement that “While business sentiments have turned positive since the beginning of the year, the LPI Group registered a slow start to FY2022 with the performance of the Group affected by a higher claims ratio and the lackluster performance of its investment portfolio.

He said in the statement that Lonpac’s Claims Incurred Ratio for 1Q2022 increased to 46.9% from 39.0% registered in the corresponding period in the previous year. ‘With a higher Management Expense Ratio at 25.6% and Commission Ratio at 3.3%, Lonpac saw an increase in its Combined Ratio to 75.8% from 63.5% reported in 1Q2021. As a result, Underwriting Profit for the period under review was 43.0% lower at RM52.6 million as compared to RM92.2 million registered in 1Q2021,’ he said

Tan Sri Teh further commented, “With the re-opening of the economy and the resumption of business activities, the demand for insurance is expected to increase. Though the LPI Group faced some headwinds in its performance for 1Q2022, the Group is confident that with its strengthened distribution channel and concerted efforts in executing its business plan, LPI will be able to report satisfactory performance for the remainder of FY2022.”

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