Prima Reinsurance’s woes are set to continue for another year as the company indicated that it forecast another loss after tax at half year 2019.
“In accordance with section 3.4(b) of the Lusaka Securities Exchange Limited (“LuSE”) Listings Requirements, the Board of Directors advises the Shareholders of Prima Reinsurance PLC (“the Company”) that the Loss Per Share (“LPS”) for the six –month period ended 30th June 2019 is expected to be approximately 50% higher than for the six-month period ended 30th June 2018” , read a statement issued by order of the board by Choice Corporate Services Limited which provides Company Secretary services to Prima Re.
The announcement comes 6 months after the company had recorded a negative bottom line for their 2018 financial year. “The Company posted a loss for the year of K 1.556 million as compared to a profit in the previous year of K2.602 million”, according to David Kombe, Board Chairman in his report to shareholders in the 2018 annual report. “This was mainly due to the large increase in the impairment of bad debts as the Company complied with the IFRS 9 standard”.
At half-year 2019, Exhilda Lumbwe (Managing Director) and her team attributes its weak performance due to unearned premium reserves. “The movement in earnings is primarily attributed to the negative charge in respect of the unearned premium reserves (UPR) which will be released as the year-end approaches”, according to the issued statement. “The charge in the UPR is as a result of the increased Gross Written Premium in the first half of 2019”. Gross written premium is the revenue generated by an insurance company before making deductions such as payments to reinsurers, commissions, and other deductions.
In May this year, Financial Insight published an article on investor concern in the company following continued uncertainty. On November 12th 2018, the company announced that there would be a possible impact on the company’s shares due to what the board termed as “circumstances relating to the company”. SENS is yet to publish a follow up regarding this matter.
