Kurnia Group
Kurnia Asia Berhad Announced Its 3rd Quarter 2005/2006 Results
May 16th, 2006
Petaling Jaya, 16 May 2006 - Kurnia Asia Berhad ("KAB") announced its unaudited
financial results for the 3rd quarter ended 31 March 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 Kurnia Group recorded a net profit of RM 41.654 million for the 3rd quarter
ended 31 March 2006 ("Q3 FY2005/06") and RM 98.567 million for the 9 months
ended 31 March 2006. This translates into earnings per ordinary share (EPS)
of 2.78 sen and 6.57 sen respectively. The year-to-date results are not comparable
to that being reported by the Group for the corresponding period in the preceding
year, which only consisted of post-acquisition results of the subsidiary, KIMB,
which was effected on 5 November 2004. The Group's total assets have grown
from RM 1.906 billion in the 2nd quarter to RM 1.917 billion in the 3rd quarter.
The Group posted a profit before tax of RM 59.379 million for the quarter
under review, representing a 108% growth from the RM 28.464 million for the
preceding quarter. The improvement in profitability was attributed to better
underwriting performance as well as investment activities. Overall underwriting
performance improved by 21.8% quarter-on-quarter, from surplus of RM 21.181
million in preceding quarter to RM 25.787 million in current quarter.
Investment and other income (net) improved significantly by 315.6% quarter-on-quarter,
from RM 8.205 million to RM 34.101 million. This was mainly attributed to the
RM 12.625 million reversal of provision for diminution in value of quoted investments
recorded during the current quarter compared with RM 9.932 million additional
provision for diminution of quoted investments for preceding quarter. This
improvement is in line with the stronger KLCI performance, where the index
rose by 3% to 926.63 point as at 31 March 2006 from about 900 as at 31 December
2005.
The Group's financial results were derived mainly from KIMB, the Group's principal
subsidiary. KIMB recorded a net profit of RM 100.177 million for the 9 months
ended 31 March 2006, representing a 7.5% growth from RM 93.224 million for
the corresponding period in the preceding year. The higher net profit recorded
was attributed to the 17.2% growth in net investment and other income, despite
being offset by an approximate drop of 5.5% in underwriting surplus.
KIMB registered an 8.0% decline in gross premium income from RM 893.370 million
for the 9 months ended 31 March 2005 to RM 821.637 million for the 9 months
ended 31 March 2006. This is consistent with the conscious efforts by the company
to streamline the underwriting portfolio by reducing non-profitable business
lines to further enhance profitability over the longer term. However, with
the higher release from the unearned premium reserve, earned premium has improved
from RM 781.197 million for the 9 months ended 31 March 2005 to RM 783.077
million for the 9 months ended 31 March 2006.
KIMB's net investment and other income improved significantly by 17.2% from
RM 50.568 million for the 9 months ended 31 March 2005 to RM 59.256 million
for 9 months ended 31 March 2006. This resulted mainly from higher dividend
and interest income generated from the Group's efforts in re-strategizing its
investment portfolio since the beginning of the current financial year. Additionally,
the improved stock market performance also contributed to better equity trading
results as well as a net write back of provision for diminution in value of
quoted investments for the current period as compared to the previous corresponding
period.
KAB's shares were included in the Kuala Lumpur Composite Index (KLCI) with
effect from 30 December 2005. Based on its share price of RM 1.29 as at 11
May 2006, KAB is now ranked number 54 in the widely followed benchmark index
with an index weight of 0.369%. 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
more than 3.3 million policyholders. It offers a full range of general insurance
products and innovative services such as Kurnia Auto Assist and Kurnia Express.