Moses Siame (CEO) and Christopher Aongola (Head -Finance) of Professional Insurance recently published their2017 unaudited half year results in the local print media in accordance of the Securities Act of 2016. The duo pointed out that growth in gross written premiums of 82% had been achieved through rapid grow in fire and engineering risks (the former is currently a hot topic in Zambia as there have been a spate of markets being charred). In addition, they also proclaimed strong sales performance of motor insurance in the period under review. This in turn meant that the financial position and cash flows of the firm were solid in the eyes of the duo.
Total assets are currently 28.3% stronger in 2017. The duo believe this is the driving force of their growth and consistent probability. However, although earnings were still in positive territory, they are currently 11.3% lower compared to this time last year. Indications from their PBIT, which was K2.7m lower compared to the previous year indicate there was an increase in SGA and cost of sales. For unaudited half year results these figures are often not published. Reasons will differ however they are not reflected of the final year performance. They only serve as a “crystal ball” to management as they endeavor to create value in the remaining half year.
Our assessment of their balance sheet showed that PPE reduced by approximately 7%. Investment property remained unchanged whilst held to maturity investment reduced by 18.25%. There was a notable surge in current liabilities by 73%. There are a myriad of reasons for this that may include increase in claims falling due or cost of finance falling due or increased payables. Whatever the reason (only to be disclosed once the audited financials are out), the management team will be making sure they keep a close eye on this as it affects working capital management. With the duo’s statement of their solvency margin being 68%, which is higher than the statutory minimum requirement of 10%, the firm’s credit rating of A+ signals a management team that is astute and believes in compliance. Furthermore, they are bullish on achieving their annual targets based on their optimism of an improving macro environment backed by their strategic positioning in the competitive arena of all their businesses.
