(The Group’s Comments) General Insurance Net Profit Down 20% to QR 245.81 Million in 2018

 

Ø  Profits: Qatar General Insurance & Reinsurance Company’s net profit amounted to QR245.8 million in 2018, a decline of 20%, compared to QR 307.4 million for the year 2017. The company’s earnings per share reached to QR 2.81 versus QR 3.51 for the year 2017. As in the fourth quarter of 2018 net profits decreased by 35.6% to QR 175.1 million, as compared to QR272.1 million for the same period of 2017. The decline in profits in 2018 was mainly due to the decline in the company's share in the profits of associates, which decreased from QR838.4 million in 2017 to QR65.3 million in 2018.

 

Ø  Operating Profit (Insurance Results): Profits from the insurance activity amounted to QR89.0 million, a decline of 20%, compared to QR 95.6 million for the year 2017, despite the increase in written premiums for 2018 by QR 41.4 million or 8%. However, 2018 saw a significant increase in claims reported by policyholders and non-paid, which rose from QR57.7 million in 2017 to QR279.5 million in 2018 (an increase of about QR 222 million), which affected the results of the company's business .

 

Ø  Investment profits: The Company achieved profits from investment activities in 2018 of about QR 369.2 million, against a loss of QR 397.6 million for the year 2017. The sources of profits from this activity include rent income, cash dividends and valuation profits for its financial assets. In 2017, valuation losses amounted to about QR 642.9 million, mostly from real estate investments.

 

Ø  Total comprehensive income: amounted to about QR 352.2 million in 2018. The company recorded an estimated profit of QR 78.3 million from valuation of its financial assets, knowing that the total gross income for the year 2017 recorded a loss of QR 85.9 million. 2017 results of valuation amounted to a loss of QR 346.8 million, and the company incurred losses of foreign currency transfers that amounted to QR 218 million (mostly from the Algerian dinar) against a loss of QR 46.7 million for the year 2018 from the currency differences item.

 

Ø  Dividend distribution: The Board of Directors recommended to the General Assembly the distribution of 10% of the nominal value of capital as cash dividends for the year 2018 (2.50% dividend yield), noting that the distribution ratio for 2017 amounted to 22%.

 

Ø  The stock is currently traded at a PE multiple of 14.33 times and a book value multiple of 0.56 times.