Continental Reinsurance Plc has posted a 36 per cent decline in profit after tax during second quarter ended June 30, 2011.
In filings from the Nigerian Stock Exchange(NSE), the unaudited result for the second quarter showed a profit after tax of N540.79 million in 2011 as against N735.63 million posted in the comparable period of 2011 representing a drop of 36 per cent.
However, the company’s gross premium stood at N6,247.79 billion during the period under review as against N4,558.87 billion in the comparable period of 2010, amounting to an increase of 27 per cent, while the net asset value stood at N12,449.66 million compared with N11,619.46 million in December 2010.
The company said recently that it has mapped out strategies, which was aimed at further repositioning it for increased dividend yield to shareholders as well as expanding its operations.
Managing Director of the company, Mr. Femi Oyetunji, stated this while addressing the capital market community.Oyetunji said this has become necessary as the country with a population of 140 million has a limited insurance penetration even as it was going to grow its shareholding from earnings in the shortest possible time.
Oyetunji said as a company which started operation in 1987 and having over 200 client presently coupled with 43 branches in the African continent, its returns on investment would continue to be the delight of investors.
According to him, the company has put strategies in place to strengthen its financial base for future growth and increase shareholders’ fund by an average of 10 per cent per annum between 2011 and 2015.
He noted that the company would increase its franchise value with a targeted share price of N4.00 by 2015, adding that with the strong expansion strategy put in place, it may come to the market in the next two years to raise additional capital.
He said with a board whose hallmark was integrity, transparency and hard work, the company was geared towards growing its bottom line by 43 per cent on a yearly basis even as it was targeting a return on investment of 7 per cent for 2011.
Oyetunji said the company has so far grew its revenue from N12 billion to N16 billion in the year, noting that following its consistent performance between 2004 to 2010, “ Non life premiums average a growth of 41 per cent, Net Investment Income averaged a growth of 46 per cent, Net Income averaged a growth of 44 per cent.”
With a consistent policy on dividend payout, Oyetunji said the company would be focusing more on existing clients with emphasis on geographic diversification for new growth opportunities outside Nigeria, just as total budgeted increase in management and administrative expenses was expected to be 13 per cent in line with business growth, cost control measures and inflation.
Notwithstanding the challenges posed by the economy in the first quarter of 2011, the Managing Director said its entire market product performed relatively well compared to last year same period.
“The satisfactory performance in first quarter of 2011 is as a result of aggressive marketing and substantial growth in the facultative portion of the life business as well as healthy claims ratio in the first quarter, which was occasioned by the substantial reduction in cash calls related to the NNPC quota share scheme of 2010.
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