| Reasons of increase (decrease) for the quarter compared with same quarter last year |
The company reported net profit for the first quarter of 2017 amounting to 6,580 thousand riyals compared to the net profit of same quarter of last year amounting to 1,423 thousand riyals, the increase in net profit is due to increase in net premium earned by 19,780 thousand riyals, increase in other net-income by 2,207 thousand riyals, increase in commission income by 772 thousand riyals , increase in reinsurance commission income by 280 thousand riyals, increase in shareholders income from investments by 159 thousand riyals and decrease in shareholders general and administrative expenses by 150 thousand riyals, which are partly offset by increase in net claims incurred by 11,225 thousand riyals, increase in policy acquisition costs by 2,547 thousand riyals ,increase in other general and administrative expenses by 2,508 thousand riyals, increase in operating and administrative salaries by 1,103 thousand riyals, increase in transfer to accumulated surplus from insurance operations by 539 thousand riyals and increase in change in unexpired risk reserve by 229 thousand riyals. |
| Reasons of increase (decrease) for the quarter compared with the previous quarter |
The company reported net profit for the first quarter of 2017 amounting to 6,580 thousand riyals compared to the net profit of the fourth quarter of the year 2016 amounting to 17,359 thousand riyals. The decrease in net profit is due to increase in net claims incurred by 10,149 thousand riyals, increase in change in other reserves by 6,284 thousand riyals, increase in policy acquisition costs by 2,035 thousand riyals, decrease in reinsurance commission income by 1,864 thousand riyals, increase in other general and administrative expenses by 1,594 thousand riyals, decrease in commission income by 915 thousand riyals and decrease in other net-income by 198 thousand riyals which are partly offset by increase in net premium earned by 9,025 thousand riyals decrease in operating and administrative salaries by 2,079 thousand riyals, and decrease in transfer to accumulated surplus from insurance operations by 1,201 thousand riyals. |
| External auditor's report containing reservation |
External Auditors drew attention in their limited review report to the following, Note 1 to the accompanying condensed interim financial statements. On 19 Jumada I 1438H (16 February 2017), the Company, based on its updated application, received SAMAs approval to decrease its share capital by Saudi Riyals 70 million in order to absorb the accumulated losses. Further, subsequent to 31 March 2017, on 27 Rajab 1438H (24 April 2017), the Company has also received the approval from Capital Market Authority and Note 7(b) to the accompanying condensed interim financial statements. The Company had a net balance receivable from Gulf Union Insurance and Projects Management Holding Company B.S.C. (c.) (GUIPMC), a shareholder of the Company, amounting to Saudi Riyals 22.29 million as it was under dispute till June 2015. Upon resolution of the dispute and certain adjustments as required in SAMAs Letter, this balance was increased to Saudi Riyals 29.07 million. GUIPMC had earlier confirmed that the balance will be settled by 30 June 2016 but the amounts have not been settled as of 31 March 2017. GUIPMC has confirmed that the outstanding amount will be fully settled by 30 June 2017. The Companys management believes that such amount will be collected before the date as confirmed by GUIPMC. |
| Other notes |
Profit / (loss) per share calculated before Zakat and income tax. Total shareholders' equity (there are no minority rights) as at 31 March 2017 was 152,492 thousand riyals compared to 128,037 thousand riyals for same period of last year, an increase of 19.1%.The accumulated losses as at the end of the current period are 67,803 thousand riyals which is 30.8% of the paid up capital. The total comprehensive income for the current period is 6,699 thousand riyals, compared to 1,560 thousand riyals for the same period last year which represents an increase of 329.4%, compared to 17,288 thousand riyals for the previous quarter which represents a decline of 61.3%. |
Comments