RESULTS - FOR THE SIX MONTHS ENDED 30 JUNE 2006 Message from Managing Director Nick Beyers
The Board approved our interim results on Tuesday, 29 August and the salient figures are given below. Full details are contained in the attached leaflet.
Rand thousands
Insurance premium revenue
R1,905,852
Net profit attributable to members of the Company
R130,564
Investment income
R95,197
Profit after tax
R132,062
Total assets
R3,982,461
Solvency margin (%)
54.0
Growth in premium revenue continued with an increase of 11.2% to R1,905.8 million (2005: R1,714.7 million). Investment income increased by R8.8 million to R95.2 million (2005: R86.4 million), indicating positive returns in the form of interest and dividend income.
Headline earnings, which excludes realised investment surpluses, of R72.1 million for the six months were 28.6% lower compared to the same period in 2005. Earnings per share of R130.6 million for the six months were 7.1% lower compared to the same period in 2005, mainly as a result of the higher realised gains and investment income compared to last year.
The net underwriting result for the period was R57.3 million (2005: R92.3 million).
Trading conditions in the first half of 2006 have been impacted by a number of factors. The main adverse factors were an increase in fire incidents, hailstorms in KwaZulu-Natal and heavy rains in Gauteng.
The motor account was negatively impacted by an increase in the incidence of accidents and hijackings. While we noted some increase in the cost of repairs for imported vehicles, we have been able to contain motor repair costs as a result of greater efficiencies and improved controls realised through our motor assessment centres. Nevertheless premium increases, in order to price appropriately for this risk, will be implemented alongside other corrective measures to address profitability.
The solvency margin increased by 6% to 54.0% (2005: 48.3%) and remains above the stated policy of maintaining solvency in the 40% to 50% range. SA Eagle remains financially sound and Global Credit Rating has recently reaffirmed its claims paying ability rating of AA+.
We would like to thank you, once again, for your loyalty and continued support.
