Highlight LPI Capital's 4Q net profit falls 12.7%, pays 50 sen dividend

by **Cals** Wed 27 Jan 2016, 20:43

Highlight

[size=28]LPI Capital's 4Q net profit falls 12.7%, pays 50 sen dividend

By Gho Chee Yuan / theedgemarkets.com | January 27, 2016 : 1:19 PM MYT

KUALA LUMPUR (Jan 27): LPI Capital Bhd ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 2.10)'s net profit declined by 12.7% to RM102.21 million or 30.79 sen per share for its fourth quarter ended Dec 31, 2015 (4QFY15) from RM117.06 million or 35.31 sen per share a year ago, due to lower realised gains on its investment in equities.

Revenue for the quarter, however, rose 6.5% to RM338.62 million, from RM299.17 million in 4QFY14, mainly driven by its general insurance segment.

The insurance group also declared a second interim dividend of 50 sen for the full year (FY15), amounting to RM166 million, payable on Feb 24.

For FY15, LPI Capital's net profit rose 13.4% to RM320.99 million or 96.69 sen a share, compared with RM283.02 million or 85.45 sen a share in FY14, due to stronger performance from its general insurance segment.

Revenue for FY15 grew 9.4% to RM1.28 billion, from RM1.17 billion in FY14.

In a statement today, LPI Capital founder and chairman Tan Sri Teh Hong Piow said the unfavourable global economic developments, coupled with weak commodity prices, have continued to dampen investor sentiment, as has the weakness of the ringgit, which is presently trading at multi-year lows.

"The depressed economic scenario has adversely affected the Malaysian general insurance industry, as reflected in the slower growth of gross premium income of 2.3% for the nine months ended September 2015, compared to 5.1% in the corresponding period in 2014," Teh added.

Nevertheless, he said the group's wholly-owned insurance subsidiary, Lonpac Insurance Bhd (Lonpac), chalked up a healthy 8.8% growth in gross premium income to RM1.25 billion in FY15, which was more than double the 3.9% growth rate registered in FY14.

"This strong business growth trend has enabled Lonpac to increase its market share to 6.8% in FY15, from 6.2% in FY14," he added.

Going forward, Teh said the group will continue to be selective on risks acceptance and maintain its posture of prudence.

"We remained confident in its strategies and emphasis on sustainability and organic growth," he added.

"The board is confident that Lonpac's healthy financial position, strong capital adequacy ratio and prudent business plan are sufficient to ensure that it can compete effectively in its core business, going forward," he said.

Shares in LPI Capital closed the morning session unchanged at RM15.80 today, for a market capitalisation of RM5.25 billion.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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