(The Group’s Comments) Islamic Insurance Net Profit Up 1.7% to QR 63.02 Million in 2018

Disclaimer: In accordance with the company's Articles of Association and in line with accounting standards, which require separation of transactions and accounts of policyholders (participants in insurance activities) and shareholders, this comment concerns the financial statements of the company’s shareholders.

Ø  Profits: Islamic Insurance Company's profits amounted to QR 63.02 million in 2018, an increase of 1.7%, compared to QR61.95 million in the previous year. The company’s earnings per share reached QR 4.20 in 2018, versus QR 4.13 in the previous year of 2017. As for the fourth quarter profits of 2018, the company recorded a drop of 53.1% to QR 5.54 million, from QR 11.8 million achieved in the same period of 2017.

Ø  Revenues: The total revenues of the company amounted to QR 112.7 million in 2018, compared to QR 100 million in 2017, an increase of 12.7%. These revenues are due to the increase in the agency's fees revenues (paid to the company against its management of insurance operations), which amounted to QR 95.6 million, compared to QR79.2 million in 2017. Speculation fees revenues from the management of the investment portfolio increased by about QR 1.19 million compared to 2017. However, the company recorded a loss from selling one of its real estate investments at QR 622,000 during the year 2018, and its profits from associates decreased from QR 3.7 million in 2017 to QR 600,000 in 2018.

Ø  Total expenses: Expenses increased in 2018 to QR 49.7 million, compared to QR 38 million in the previous year. 2018 expenses include QR 10 million as investment loss in associates. The expense / revenue ratio for the year 2018 was 44%, versus 38.0% in 2017.

Ø  Dividends: The Board of Directors recommended to the General Assembly the distribution of 35% of the nominal value of capital (equivalent to QR3.5 per share) as cash dividends for the year 2018 (6.14% dividend yield), which is the same distribution ratio of 2017.

Ø  The stock is currently traded at a PE multiple of 13.60 times and a book value multiple of 2.29 times