By: InterMarket Securities Limited
On an unconsolidated basis, AICL has reported NPAT of PkR580mn (EPS: PkR1.66) in 3QCY15 vs. NPAT of PkR546mn (EPS: PkR1.56) in 3QCY14, up by a modest 6%YoY on lower investment income; core underwriting profitability up a stellar 6.9x YoY is the more relevant metric in our view.
Key 3QCY15 result highlights include: (i) 31%YoY growth in premiums with claims/combined ratio at 61%/89%, significantly better than 67%/98% in 3QCY14, (ii) 24%YoY decline in investment income and (iii) 7%YoY decline in total admin expenses. Sequentially, profits are lower by 33%QoQ on significantly lower investment income while underwriting result has been flat.
9MCY15 profits have registered at PkR2.18bn (EPS: PkR6.23), up 57%YoY with the improvement led by a clear turnaround in the core business. AICL has gained 14%CYTD to trade at a trailing P/E of 6.8x (based on annualized 9M results). We remain positive on AICL, with latest results stretching the trend of PkR200mn+ underwriting profits for the 4th successive quarter (by way of comparison, underwriting profits totaled just PkR83mn in the 12qtrs from 1QCY12 to 4QCY14).
|AICL – Result Review|
|Total Admin & Others||143||155||-7%||-3%||421||326||29%|
|Source: Company Accounts, IMS Research|