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City General Insurance Company Ltd posted a staggering 34 per cent surge in net profit in 2023, thanks to an increase in re-insurance payment and underwriting profit.
The insurer's net profit rose to Tk 20.58 crore for the just concluded 2023, from Tk 15.33 crore recorded in the previous year. The company's earnings also jumped significantly, with posting earnings per share (EPS) of Tk 3.02 for 2023 against Tk 2.25 for the previous year.
Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses that have been paid and administrative expenses that have been deducted.
In recognition of this solid annual performance, the company's board declared the highest dividend, after listing in the capital market, at 12 per cent cash to shareholders for the year 2023, as per a Dhaka Stock Exchange (DSE) filing published Monday.
The company paid a cash dividend of 10.50 per cent in cash or Tk 1.50 per share for 2022.
City General Insurance said the reasons for increasing profit is the significant rise in underwriting profit and others income. The insurer's net asset value (NAV) per share rose to Tk 20.40 at the end of 2023, from Tk 18.57 for 2022.
Meanwhile, its net operating cash flow per share (NOCFPS) stood at Tk 2.53 for 2023, a drop from Tk 5.59 for the previous year. The company is scheduled to hold its annual general meeting (AGM) on March 28.
NOCFPS has been decreased because the company's premium income has decreased, and re-insurance payment has been increased, read the DSE filing.
NAV has been increased because the company's investments in shares, Government Treasury Bond, and FDR have been increased sharply, it added. It has fixed the record date as March 12 for share splits.
The company distributed a year-end cash dividend of 5 per cent to shareholders due to a business slowdown in 2018 and 2019. As a result, in 2017, the company in the “A” category came down to the “B” category.
In transition 2020, the company once again distributes a 10 per cent cash dividend and rises to the “A” category. As per law, a company that distributes less than 10 per cent of its dividend, and meets other criteria, like the “A” category, will be in the “B” category.
Companies that do not pay regular dividends, hold AGMs, and do not report financial statements regularly are demoted to the “Z” category.
City General Insurance was listed on the DSE in 2007. During the last few months, the share price of City General Insurance fluctuated from Tk 50.3 to Tk 69.8. In 2022, the company gained Tk 15.33 crore in profit, which was 34 per cent higher than the previous year of 2021.
