Meghna Insurance profits soar on lower insurance claims

Meghna Insurance Company Limited reported a whopping profit rise of 121 per cent in the first quarter of the year 2023 on a year-on-year basis.

The listed insurer in the January-March quarter of 2023, posted Tk 3.52 crore in net profit, against the profit of Tk 1.59 crore in the same quarter a year ago.

The insurer in its quarterly financial report said a significant increase in profit in the January-March quarter of the current year was possible due mainly to lower insurance claims, and a decrease in management expenses.

Earlier, in the January-March quarter of 2021, the company’s profit after tax was Tk 2.66 crore.

The insurer’s earnings per share (EPS) rose to Tk 0.88 for the January-March quarter of 2023 from Tk 0.66 for the same quarter last year.

The listed firm’s net asset value (NAV) per share was Tk 15.24 as on March 31, 2023 which was Tk 17.21 till December 31 last year.

The company said in its financial statement that its earnings soared in the January-March period of the current year due to a decrease in management expenses, reinsurance, and claims.

The company paid total insurance claims worth Tk 1.02 crore during January–March of 2023, compared to Tk 6.33 crore in the same period last year.

The company on May 15 released its financial statement for the first quarter of 2023.

Following the disclosure, the company’s shares price jumped by 43 per cent in the next four trading days till Thursday.

The company’s shares price surged from Tk 30 to TK 43 each in those four trading sessions, making it the second top gainer last week.

The principal business of Meghna Insurance is to provide all kinds of insurance, guarantees, and indemnities other than life insurance.

It provides fire, marine, engineering, motor, and other miscellaneous insurances.

Meghna Insurance Company Limited registered a 40 per cent year-on-year profit rise to Tk 5.28 crore in the financial year ending on December 31, 2022.

The company had made Tk 3.76 crore in profit in 2021, according to its annual financial statement.

Its earnings per share for the year 2022 were Tk 1.32 against Tk 0.94 for the previous year.

The company’s board of directors recommended a 10 per cent cash dividend for the last financial year ending in December 2022.

The insurer’s net asset value (NAV) per share stood at Tk 17.21 at the end of the year 2022, which was Tk 17.88 at the end of the previous year, as per its annual financial report.

Moreover, the company’s net operating cash flow per share (NOCFPS) was Tk 1.33 negative for the year 2022, against Tk 6.13 for the previous year.

The insurer in its annual financial report for 2022 said the EPS had increased over the previous year due to an inflow of IPO fund, increase in premium income, non-operating income and a decrease in financial cost.

But the NOCFPS and NAV per share got decreased in 2022 over the previous year owing to the increased number of shares (weighted average number of shares).

In 2022, the insurance company had raised TK 16 crore through an initial public offering (IPO). Out of the capital raised, the insurer invested Tk 2.4 crore in government Treasury bonds, Tk 3.2 crore in listed securities, and Tk 9.52 crore in fixed deposit receipts (FDRs).

With a paid-up capital of Tk 40 crore, the insurer has an authorised capital of Tk 100 crore.

Sponsor-directors owned a 30.28 per cent stake in the company, while institutional investors 19.32 per cent and the general public 50.40 per cent as on April 30, 2023, as per the DSE data.