Britam Holdings Plc on Friday recorded Ksh. 3.5 billion profit after tax for the year ending 31st December 2019 compared to Ksh. 2.29 billion loss it announced in the same period in 2018.
This was driven by an increase in gross revenue which increased to Ksh. 27 billion from Ksh. 24 billion. Investment income also increased to Ksh. 7.7 billion from Ksh. 6.1 billion in 2018 while revenue from the sale of assets stood at Ksh. 4.7 billion.
Going forward, “There are a number of key global and regional risks that affect the group including Covid-19, locusts’ invasion and a decline in the stock market performance,” said Group managing director Benson Wairegi.
“We are optimistic that there will be concerted effort to mitigate the effects of these adverse developments to the economies and the world at large.”
Total expenses increased to Ksh. 31 billion from Ksh. 26 billion in the previous year. This was largely driven by an increase in insurance claims to Ksh. 15.4 billion, interest payments to Ksh. 3.8 billion, operating expenses to Ksh. 8.7 billion and commissions to Ksh. 3.4 billion. Finance costs, however, decreased to Ksh. 234 million from 905 million in 2018.
Net assets increased to Ksh. 29 billion from Ksh. 23 billion in the previous year. This was driven by an increase in total assets to Ksh. 125 billion from Ksh. 103 billion. Total liabilities, however, increased to Ksh. 95 billion from Ksh. 79 billion in 2018.
The Board of Directors recommends the payment of a dividend for the year of Ksh. 630.9 million which will translate to a dividend of Ksh. 25 cents per share.
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“The insurer has been under the second phase of its strategy implementation whose key drivers have been focus on cost containment, expanding distribution networks, coupled with improving synergies across business segments.
On cost containment, we have observed y/y stability in the ratios especially the claims and expense ratios despite these being above historical averages.
However, we maintain that diversification, especially on the portfolio mix, will be key for the Group going forward, and the concentration risk in quoted equities will remain a perennial hiccup on the firm’s operating results if not diluted,” Commentary from Genghis Capital, Britam Holdings Plc (NSE: BRIT) FY19 Earnings Note.
