Gulf Union Cooperative Insurance Co. announces the interim financial results for the period ending on 30-09-2017 (Nine Months)

Gulf Union 8120 -2.97% 15.02 -0.46
Element Current quarter Similar quarter for previous year % Change current Previous quarter % Change previous
Net profit (loss) before Zakat 2,009 -234 - 5,783 -65.26
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results) 1,619 -512 - 5,947 -72.78
Gross written premiums (GWP) 32,477 46,003 -29.4 78,956 -58.87
Net written premiums (NWP) 17,170 26,482 -35.16 52,427 -67.25
Net incurred claims 30,543 12,025 154 35,411 -13.75
Net profit (loss) of policy holders investment 1,470 785 87.26 1,293 13.69
Net profit (loss) of shareholders capital investment 302 787 -61.63 811 -62.76
All figures are in (Thousands) Saudi Arabia, Riyals
Element Current period Similar period for previous year % Change
Net profit (loss) before Zakat 14,373 7,606 88.97
Surplus (deficit) of insurance transactions less returns of policy holders investment (operating transactions results) 13,730 7,774 76.61
Gross written premiums (GWP) 272,127 181,377 50.03
Net written premiums (NWP) 160,623 88,018 82.49
Net incurred claims 91,994 38,150 141.14
Net profit (loss) of policy holders investment 3,816 1,607 137.46
Net profit (loss) of shareholders capital investment 1,777 1,870 -4.97
Earning or loss per share, Riyals 0.96 0.53 -
All figures are in (Thousands) Saudi Arabia, Riyals
Element EXPLAINATION
Reasons of increase (decrease) for the quarter compared with same quarter last year The company reported the reason for resulting of net profit for the third quarter of 2017 amounting to 2,009 thousand riyals compared to the net loss of same quarter of last year amounting to 235 thousand riyals, the increase in net profit is due to increase in net premium earned by 30,449 thousand riyals, increase in Reinsurers share of gross claims paid by 16,026 thousand riyals, decrease in Reinsurance premium ceded by 3,400 thousand riyals and decrease in Excess of loss by 214 thousand riyals, which are partly offset by decrease in Gross written premium by 13,526 thousand riyals, increase in gross claims paid by 30,813 thousand riyals and increase in general and administrative expenses by 3,736 thousand riyals.
Reasons of increase (decrease) for the period compared with same period last year The company reported the reason for increase of net profit for the 9 months ended September 30, 2017 amounting to 14,373 thousand riyals compared to the net profit of same period of last year amounting to 7,606 thousand riyals, the increase in net profit is due to increase in Gross written premium by 90,750 thousand riyals, increase in Reinsurance share of paid claims by 32,345 thousand riyals, increase in Commission income by 2,209 thousand riyals and decrease in Change in other reserves by 3,078 thousand riyals which are partly offset by increase in net claims paid by 34,396 thousand riyals, increase in net claims incurred by 53,844 thousand riyals, increase in Policy acquisition cost by 9,893 thousand riyals, increase in Operating and administrative salaries by 3,187 thousand riyals, decrease in Other income by 2,188 thousand riyals and decrease in Income from investments by 93 thousand riyals.
Reasons of increase (decrease) for the quarter compared with the previous quarter The company reported the reason for decrease of net profit for the third quarter of 2017 amounting to 2,009 thousand riyals compared to the net profit of the second quarter of the year 2017 amounting to 5,784 thousand riyals, the decrease in net profit is due to decrease in Net earned premium by 2,326 thousand riyals, decrease in Reinsurance commission income by 872 thousand riyals, increase in other General and administrative expenses by 3,437 thousand riyals, increase in Operating and administrative salaries by 650 thousand riyals ,and decrease in Income from investments by 510 thousand riyals, which are partly offset by decrease in Net claims incurred by 4,868 thousand riyals, increase in Reinsurance share of gross claims paid by 4,558 thousand riyals, decrease in Policy acquisition cost by 971 thousand riyals, decrease in general and administrative expenses by 470 thousand riyals, increase in Commission income by 178 thousand riyals, and increase in Other income by 495 thousand riyals.
External auditor's report containing reservation External Auditors drew attention in their limited review report to the following, note 3 and 7(b) to the accompanying condensed interim financial statements; the Company has an outstanding net receivable of SR14.76 million from Gulf Union Insurance and Projects Management Holding Company B.S.C. (c.) (GUIPMC), a major shareholder of the Company, as explained in note 7b (ii). The net receivable has not been settled as of 30 June 2017 as previously confirmed by GUIPMC. However, GUIPMC has already initiated the process by seeking approval from the regulators to proceed with partial sale of its shares in the Company to settle the net receivable. Accordingly, the Companys management believes that such amount will be collected in the due course. Our conclusion is not qualified in respect of this matter.
Other notes Earnings per share has been changed after reducing the company's capital Due to capital reduction number of shares in current quarter decrease to 150 million from 220 million as the same quarter last year. general assembly meeting was held on 18/5/2017 which they agree on capital reduction. Total shareholders equity (there are no minority rights) as at 30 Sept 2017 was 156,231 thousand riyals compared to 134,054 thousand riyals for same period of last year, an increase of 16.5%.The retained earnings as at the end of the current period are 4,215 thousand riyals which is 2.8% of the paid up capital compared to the same period of last year 87,057 thousand riyals and for the previous quarter retained earning amounting 3,417 thousand riyals. The total comprehensive income for the current period is 14,459 thousand riyals, compared to total comprehensive income 7,972 thousand riyals for the same period last year, an increase of 45%, The total comprehensive income for the current quarter is 1,942 thousand riyals, compared to total comprehensive loss 132 thousand riyals for the same quarter last year, compared to 5,818 thousand riyals for the previous quarter which represents an decrease of 200%.

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