NAIROBI, Kenya, Mar 13 – Financial services company UAP Group profits before tax rose by 76 per cent to Sh1.2 Billion for the year ending 31st December 2016, compared to Sh700 Billion achieved in 2015.
However, profit after tax declined by 8 percent to Sh830 million (from Sh900 in 2015) largely as a result of a significant tax credit enjoyed in 2015 not recurring 2016, the company said.
Total Income was up 18 percent from Sh16 Billion in 2015 to Sh19 billion.
UAP Old Mutual Group CEO Peter Mwangi has said the strong performance was attributed to profitable growth in the core insurance business and prudent cost management.
The Group’s Gross Written Premiums rose by 15 percent buoyed by strong growth across all markets, while net earned premium increased by 28 percent.
“The higher growth in net earned premium reflects our ability to retain more risks due to our strengthened capital base,” said Mwangi.
However, the company took a hit in its total comprehensive income in the year under review as a result of the devaluation of the South Sudan pound and a down turn at the Nairobi Securities Exchange.
“The NSE 20 and NASI indices shed 21.1pc and 8.5pc respectively in 2016 as the equity market was rattled by the introduction of the Interest Rate Cap legislation in the second half of the year and its impact on the future earnings growth of the listed bank stocks that comprise a significant weight of the equity market,” said the company.
Short term insurance claims ratio reduced from 62pc to 59pc. Long term business net policyholder benefits payable increased by 28pc due to an increase in the actuarial reserves driven by new business growth.
“We expect that these reserves will unwind over time and contribute to future earnings,” said Mr. Mwangi.
The Board of Directors has recommended a dividend payout of Sh359 million equivalent to Sh1.70 per share.