Written by The Edge
Great Eastern Holdings reported profit attributable to shareholders of $253.5 million for the first half of 2010 (1H10), an increase of 86% over the same period last year after excluding a one-time profit contribution (after tax) of $198.5 million in 1H09.
The one-time profit contribution last year arose from the move to a new risk-based regulatory capital framework in Malaysia and a portfolio matching exercise in Singapore.
Great Eastern says the good half-yearly performance was driven by continued strong underwriting profits arising from the group’s focus on protection products as well as lower management expenses.
However, group profit attributable to shareholders for 2Q10 declined 24% y-o-y to $74.4 million due to the poor investment performance arising from concerns relating to Eurozone debt. However, this was offset by a stronger performance in 1Q10 which resulted in a better overall performance for 1H10.
For 1H10, profit from the group’s insurance operations was $226.9 million (1H09: $408.9 million which included one-time profit contributions before tax of $210.4 million). If the one-time profit contributions in 1H-09 were excluded, recurring profit from the group’s insurance operations would have been 14% higher compared with last year. Growth was mainly due to improved profits from underwriting arising from lower expenses and claims.
Profit from insurance operations for the second quarter decreased 43% y-o-y to $75.0 million (2Q09: $131.3 million) due to poor investment performance.
In 1H10, fees and other income were 20% higher at $35.3 million (1H09: $29.5 million) due to the growth in assets under management (AUM) of Lion Global Investors.
Dividends of 10 cts have been declared.
