LPI Capital declares 26 sen dividend despite 3.4% drop in Q2 earnings

PETALING JAYA: LPI Capital Bhd reported a 3.4% decline in net profit to RM65.74 million for the second quarter (Q2) ended June 30, 2018 compared with RM68.06 million in the previous corresponding period, due to higher commission and management expenses.
Its revenue was flat at RM353.05 million versus RM352.71 million in the same quarter last year.
The group has proposed to declare an interim dividend of 26 sen amounting to RM103.6 million for the quarter under review.
LPI's wholly owned subsidiary Lonpac Insurance's gross premium income dropped 1.1% to RM303.8 million for Q2 from RM307.2 million previously, but its net earned premium income increased 5.9% to RM225.1 million from RM212.5 million, while the underwriting profit maintained at RM70.6 million
Its claims incurred ratio for Q2 climbed to 41% from 39.7% and the combined ratio increased slightly to 68.7% from 66.8%.
LPI's first-half net profit went down slightly by 0.3% to RM138.24 million from RM138.63 million, while revenue grew 4.8% to RM734.05 million from RM700.35 million.
The group's founder and chairman Tan Sri Teh Hong Piow said with phase two of market liberalisation coming in full force, the Malaysian general insurance industry continues to see stiff competition as players are taking advantage of the liberalised environment to build their respective market share.
"The new competitive environment has caused profit margin to compress and LPI group has worked to compensate the lower margin with a bigger market share."
At the noon break, LPI's share price fell 2 sen or 0.1% to RM16.98 on 15,300 shares done.