LPI records steady performance despite COVID-19

LPI Capital Bhd’s net profit eased slightly to RM86.18 mil in the third quarter ended Sept 30, 2020 (3Q20) from RM87.82 mil a year earlier, partly due to a 43.6% drop in investment income.

The general insurance firm said while fair value gains on investment recorded a year-on-year (yoy) increase of RM4.6 mil, total dividend and interest incomes declined by RM14.5 mil.

“The investment holding segment recorded a lower profit before tax of RM14.2 mil compared to RM27.5 mil in the corresponding period in 2019,” it said in a filing with Bursa Malaysia today.

Revenue also declined to RM395.76 mil compared to RM423.84 mil a year earlier, affected by a 96% fall in the investment holding segment’s revenue to RM600,000.

While the general insurance segment posted 3.3% lower revenue of RM395.2 mil, its pre-tax profit rose by 15.3% yoy to RM113.1 mil from RM98.1 mil in the third quarter of 2019.

Underwriting profit for 3Q20 increased by 14.0% to RM86.3 mil, mainly due to lower claims incurred and management expenses compared with the corresponding quarter in 2019, LPI said.

For the nine-month period, the group recorded a net profit of RM241.5 mil from RM235.76 mil in the same period last year while revenue was flat at RM1.2 bil.

In a press statement, group chairman Tan Sri Teh Hong Piow said widespread economic impacts continued months after the COVID-19 virus was first reported and this had been felt across multiple sectors of the economy.

“However, I am pleased to advise that the LPI group, despite the challenges, has managed to report a creditable performance for 3Q20,” he said.

Teh said the various additional economic stimulus announced recently by the government was expected to further support the efforts to revive the economy.

He also mentioned that with the right standard operating procedures in place and improved compliance by the public, LPI should be able to manage the COVID-19 situation despite the recent spike in cases while, at the same time, the economy can continue functioning.

“For the group, we need to continue assessing the range of possible future scenarios and develop corresponding strategic actions to address these possible scenarios in order to thrive in the new reality,” he added. – Oct 15, 2020

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