BKIC posts nine-month profit of BD3.96 million

TDT | Manama    

The Daily Tribune – www.newsofbahrain.com

Bahrain Kuwait Insurance Company (BKIC) reported profits for third quarter and nine-month period of 2023, as permiums and investments grew, despite being impacted by change of IFRS17 discounting rate used in 2022 when reinstating the financials, which resulted in a one-time exceptional increase in profit for that period in 2022.

Third-quarter results

Q3-2023 net profit attributable to the shareholders was BD 1.184 million compared to BD 0.966m for the same period last year, representing an increase of 23%.

Earnings per share were 8 fils compared to 6 fils for the same period of last year.

Total comprehensive income attributable to the shareholders reached BD 0.855m compared to BD 0.763m in Q3-2022, registering an increase of 12%.

The increase was mainly due to increased fair value gains recorded in the 3rd quarter 2023 compared to the same period in 2022.

The Company achieved 14% growth in Insurance revenue, from BD 24.863m in the 3rd quarter of last year to BD 28.267m in the 3rd quarter of the current year.

The Insurance service results increased by 75%, from BD 0.590m in the 3rd quarter of last year to BD 1.032m in the 3rd quarter of the current year.

The Total investment income increased by 9%, from BD 0.833m in the 3rd quarter of last year to BD 0.912m in the 3rd quarter of the current year.

Nine months results

Nine-month net profit attributable to the shareholders was BD 3.962m, compared to BD 4.522m (reinstated) of the same period last year, representing a decrease of 12%.

Earnings per share were 27 fils during the current period compared to 30 fils of the same period last year.

The total comprehensive income attributable to the shareholders was BD 3.386m compared to BD 2.589m for the same period last year, registering an increase of 31%.

The company achieved 5% growth in gross premium revenue of BD 74,837m, compared to BD 71.178m in the first nine months of last year.

The Insurance service result decreased by 14%, to BD 3.016m in the nine months of this year compared to BD 3.511m in the same period last year.

The net investment income increased by 31%, from BD 2.666m in the nine months of last year to BD 3.505m in the same period of this year. Despite growth in premiums and significant improvement in investments performance, the company's net profit has declined compared to the previous year.

This decline is primarily due to the change of IFRS17 discounting rate used in 2022 when reinstating the financials, which resulted in a one-time exceptional increase in profit for that period in 2022.

The Board of Directors expressed their satisfaction stating: “The Board of Directors is pleased with the results for the first nine months of 2023 as the company was able to achieve this result despite challenging new projects being implemented in 2023.”

BKIC’s CEO Dr. Abdulla Sultan commented: “We would also like to remind our shareholders that the company adopted completely new accounting standards in 2023 (IFRS 17) which resulted in a 9-month net profit of BD 3.962m while last year’s audited financials based on IFRS 4, showed a 9-month net profit of BD 3.501m.

The new accounting standards were put into effect on 1/1/2023 and the company had to reinstate its 2023 financials to reflect IFRS17 for comparison purposes.

It is worth mentioning that the assumptions applied in 2022 differed greatly from those currently applied as these new standards are a learning experience and the company continues enhancing its assumptions to become more conservative in 2023.

The gap between IFRS 17 net profit compared the same period last year, narrowed to BD 0.560m compared from the position of the first nine months, due to fine tuning of the assumptions as the standard is still evolving.”