Harimau Capital

Review of Group Performance

The Group‟s revenue for the current quarter increased by 25.5% to RM239.3 million largely contributed by the general insurance segment which marked a commendable growth of 26.2% over the corresponding quarter. The increase was mainly contributed by higher gross earned premium for the quarter which registered an increase of RM47.4 million (25.8%) over the corresponding quarter. The increase in gross earned premium is in line with the strategic planning and business efforts of the Group in growing the profitable insurance business. The revenue from investment holding segment decreased from RM1.2 million to RM0.2 million as compared to corresponding quarter due to lower interest income received during the quarter.

With commendable growth in the gross earned premium, contained net claims incurred ratio at 50.4% and lower net commission expense, the Group managed to register a profit before tax of RM53.3 million from general insurance segment. This represents an increase of RM3.5 million (7.0%) over the corresponding quarter. After offsetting with lower profit from investment holding segment, the Group still recorded a respectable higher profit before tax of RM52.0 million, increased by RM2.9 million (5.8%) over the corresponding quarter in 2010.

The Group‟s revenue for the financial year increased by 20.1% to RM902.7 million mainly contributed by the general insurance segment which recorded a growth of 22.3%. The increase was mainly contributed by higher gross earned premium for the financial year which registered an increase of RM151.4 million (21.9%) over last year. The revenue from investment holding segment recorded a decrease of RM7.9 million to RM31.6 million as lower dividend income was received during the year.

For the financial year under review, the Group chalked up a profit before tax of RM200.1 million, which showed an increase of RM18.8 million (10.4%) compared to last year. The increase in profit before tax was contributed by the general insurance segment, which recorded a profit before tax of RM174.8 million, up by RM26.3 million from last year. Investment holding segment recorded a lower profit before tax of RM25.3 million compared to RM32.9 million last year mainly due to lower dividend income as mentioned above.


FY2012 Prospects

For the general insurance segment, in spite of the challenging and competitive business environment, LPI Capital Group is confident to increase its market share and maintain the favourable growth. The Group‟s robust business plan and strong balance sheet, which are built on a broad foundation, enable the Group to respond innovatively even in a persistently challenging market. The Group will continue to assess all business opportunities with the objective of maximising long term shareholder value.

The challenges facing the global developed economies are growing rapidly with very little evidence to suggest that there will be an imminent solution to address these concerns. This in turn may affect the investment segment of the Group. The Group views the dividend income from this segment with caution. However, the Group does not foresee it has any big impact to the overall profit as the investment segment only formed about 13% of the Group‟s total profit in the financial year 2011.
Barring unforeseen circumstances, the Group is confident it will maintain its earnings momentum and deliver a satisfactory performance.

Dividend

LPI had declared a second interim single tier dividend for the financial year ended 31 December 2011.
a.) The amount per share: 50.00 sen single tier to be paid at 2 February 2012. (The previous corresponding period for second interim single tier dividend: 45.00 sen single tier).

b. The total dividend for the financial year 2011 is 75.00 sen (55.00sen on FY2010)