LPI earnings up on unit’s higher underwriting profit

Friday October 8, 2010
LPI earnings up on unit’s higher underwriting profit

PETALING JAYA: LPI Capital Bhd’s net profit for the third quarter ended Sept 30 rose to RM36.21mil from RM32.90mil in the same period last year.

This was achieved on higher underwriting profit generated by its wholly-owned subsidiary Lonpac Insurance Bhd.

Revenue for the period increased to RM216.95mil from RM206.63mil recorded in the same period last year mainly due to higher gross premium underwritten, the company told Bursa Malaysia yesterday.

Earnings per share rose to RM16.85 from RM15.33.

For the nine months ended Sept 30, LPI’s net profit was up to RM100.97mil from RM91.12mil previously while revenue rose to RM640.46mil from RM583.88mil.

Earnings per share increased to RM47.03 from RM42.46.

Barring any unforeseen circumstances, LPI said prospects for the group should be satisfactory for the year 2010.

In a separate statement, LPI chairman Tan Sri Teh Hong Piow said Lonpac was able to achieve a significant improvement in its underwriting surplus despite operating in a competitive market.

Its underwriting surplus rose by 38% to record an underwriting profit of RM77.9mil for the nine-month period versus RM56.5mil previously on the back of gross premium income of RM586.3mil.

“Lonpac places utmost priority on strong risk management of its assets and liabilities as well as stringent internal controls in managing its operations,” he said.

LPI shares closed up six sen to RM11.76 yesterday with 17,900 shares traded.

http://biz.thestar.com.my/news/story.asp?file=/2010/10/8/business/7184502&sec=business

Comment:  This remarkable company has seen at least 15% annual growth in its revenues, profit before tax and EPS for many years.  This speaks for its durable competitive advantage in its insurance business.