CIC Group chief executive Patrick Nyaga. Regional insurer CIC Insurance Group Plc has bounced back to profitability. PHOTO | COURTESY Regional insurer CIC Insurance Group Plc has bounced back to profitability laying the groundwork for ending a two-year dividend drought for shareholders.
The turnaround is also expected to bolster the firm’s stock on Nairobi Securities Exchange that is trading as low as Ksh3 ($0.02) per share against a par value of Ksh1 ($0.01) per share.
“We recognise shareholders right and importance of a dividend. The board shall work with management to raise performance,” the Group’s integrated annual report (2020).
The insurer which has operations in Kenya, Uganda, Malawi and South Sudan posted a net profit of Ksh259.52 million ($2.4 million) during the six months period to June 30 from a net loss of Ksh335.53 million ($3.1 million) in the same period last year, with all subsidiaries save South Sudan contributing to the bottom-line.
The improved performance was largely due to increased income from stock market investments and offsetting of forex losses related with currency translation of foreign subsidiaries.
“We continue to review and implement a functional structure to support achievement of the overall group objectives. Balance sheet reorganisation is on course and aims at optimal utilisation of available resources including disposal of non-core assets and focusing on core business,” Patrick Nyaga, the group’s chief executive said in a statement last week.
“Management will continue implementing mitigating strategies to contain the adverse effects of Covid-19 on business environment to manage the expectations of all the stakeholders.”
During the period, the group’s total income increased by 18 percent to Ksh9.77 billion ($90.46 million) , with Gross Written Premium growing 16 percent to Ksh10.8 billion ($100 million).
Last year, CIC Group embarked on a process to dispose off property to raise more than Ksh8.82 billion ($81.66 million) to strengthen earnings that have been adversely affected by growing claims in some key lines of business.
The group made a net loss of Ksh296.83 million ($2.74 million) from Ksh321.59 million ($2.97 million) and Ksh480.94 million ($4.45 million) in 2019 and 2018 respectively.
The loss was largely attributed to growth in claims, drop in investment due to the poor performance of the equities market and a slump in revaluation gains on property investments.The insurer wrote off Ksh59.8 million ($553,703.7) it had invested in short-term debt issued by the collapsed retail chain Nakumatt Holdings.CIC Insurance had invested more than Ksh70 million ($648.14 million) in Nakumatt’s commercial […]