Kurnia Group
Kurnia Asia Berhad Announced Its Second Quarter 2006/07 Unaudited Results
February 9th, 2007
Petaling Jaya, 9 February 2007 - Kurnia Asia Berhad (KAB) announced its unaudited
financial results for the second quarter (Q2) ended 31 December 2006 at its
Corporate Head Office, Menara Kurnia. KAB, which wholly owns Kurnia Insurans
(M) Berhad (KIMB), is the largest general insurer listed on the Main Board
of Bursa Malaysia under the counter KURASIA 5097.
The Group recorded a net profit of RM 60.799 million for the 6 months ended
31 December 2006, which translated into net earnings per ordinary share (EPS)
of 4.05 sen, representing a 6.8% growth compared to the net profit of RM 56.913
million or EPS of 3.79 sen for the corresponding period in the preceding year.
The improvement in overall profitability was mainly attributed to the strong
investments performance, which cushioned the lower underwriting surplus recorded
during the current period.
Gross premium income for the first 6 months declined by 1.7% year-on-year,
from RM 538.265 million to RM 529.281 million. This was mainly a result of
slower vehicle sales and drop in vehicle market values caused by the National
Automotive Policy (NAP) introduced in March 2006 and higher fuel prices as
well as higher interest rates. Claims expense increased by 1.0% year-on-year,
from RM 328.486 million to RM 331.782 million, whilst claims ratio weaken from
62.4% to 65.6% partly due to the lower earned premium base recorded for the
current period. The higher claims expense was mainly contributed by the additional
provision of IBNR claims reserves booked in on a quarterly basis, a practice
that the Group started since the beginning of the current financial year, in
order to even out the impact of annual revision of IBNR claims reserves that
was only done once a year in the final quarter in previous years.
The Group's total assets expanded from RM 2.019 billion at the end of preceding
quarter to RM 2.059 billion at the end of the current quarter, while net assets
value (NAV) per ordinary share grew from 33.79 sen to 34.73 sen, despite the
payment of an interim net dividend of RM 20 million during the quarter.
For the quarter-on-quarter performance, gross premium income dropped by 1.3%
quarter-on-quarter, from RM 266.434 million to RM 262.847 million as the motor
segment continued to be affected by slower car sales as well as lower car prices.
Despite the challenging market, the Group posted a profit after tax of RM 37.038
million for the quarter under review, representing a growth of 55.9% from RM
23.761 million for the preceding quarter.
Investment performance improved by 112.7% quarter-on-quarter, from a net income
of RM 21.828 million to RM 46.421 million. The improvement reflected the results
of the Group's efforts in restructuring its investment portfolio that enabled
it to take full advantage of the stronger performance of Bursa Malaysia. The
KLCI at the end of the quarter rose by 13.3% to 1,096.24 points from 967.55
points as at 30 September 2006.
Recognizing the market challenges ahead, the Group will continue its efforts
on the implementation of various existing management initiatives as well as
new initiatives to re-strategize its business operations and cost controls.
The recent proposed acquisition of PT Asuransi Aegis Indonesia, which marked
the beginning of the Group's official access to the regional insurance market
outside Malaysia, is expected to enhance the value of the Group and contribute
to its profitability in the future.
On the corporate front, KAB's shares were included in the Kuala Lumpur Composite
Index (KLCI) since 30 December 2005. Based on its share price of RM 1.15 as
at 7 February 2007, KAB is now ranked number 64 in the widely followed benchmark
index with an index weight of 0.253%. KAB's shares were also included in the
Morgan Stanley Capital International Inc. (MSCI) Malaysia Index since 1 June
2005.
The Kurnia Group is the largest general insurer in Malaysia and Southeast
Asia with gross premiums exceeding RM 1 billion. The Group has a wide network
of 30 branches, more than 1,900 employees, a 7,200-strong agency force and
3.5 million policyholders. It offers a full range of general insurance products
and innovative services such as Kurnia Auto Assist, which is supported by a
large pool of service providers including more than 500 authorized auto panel
workshops throughout the country. In the event of a breakdown or an accident,
Kurnia's policyholders can call the 24-hour KAA toll-free number 1800-88-3833.
Kurnia guarantees that KAA assistance will be available within 1 hour.