GREAT Eastern Holdings Great Eastern: G07 -0.32% on Tuesday (Feb 22) posted a net profit of S$229.8 million for the fourth quarter ended Dec 31, 2021, down 33 per cent year on year from S$341.3 million.

 

The insurance arm of local bank OCBC said in its financial results this dip was due to the year-ago period recognising a one-off positive tax impact that arose from the finalisation of prior years' tax assessments.

 

In an earnings call on Tuesday, group chief financial officer Ronnie Tan also noted that the company' s profits were affected significantly by market movement. While equity markets in 2020 experienced a strong rebound after they initially crashed due to the Covid-19 pandemic, they had been relatively stable in 2021.

 

For the quarter, the group saw operating profit, net of tax, from its insurance business increasing by 126 per cent to S$173.9 million, from S$76.8 million the previous year.

 

Non-operating profit for the insurance business for Q4 FY2021, however, dipped by 6 per cent on-year to S$44.7 million, from S$47.3 million.

 

Its Q4 FY2021 profit from shareholders' fund also tumbled 93 per cent to S$17 million from S$228.1 million in Q4 FY2020.

 

Total weighted new sales (TWNS) for the 3 months sank 6 per cent year on year to S$496.9 million, from S$527.9 million, contrasting the quarter' s new business embedded value (NBEV), which went up 9 per cent year on year to S$262 million from S$239.4 million.

 

Its directors have recommended a final dividend of S$0.55 per share, up from S$0.50 in H2 FY2020, for the second half-year ended Dec 31, 2021.

 

Upon approval by shareholders at the next annual general meeting, the dividend will be paid on May 5, 2022. Including an interim dividend of S$0.10 paid in August 2021, this would bring the full FY2021 dividend up to S$0.65 per share, increasing from S$0.60 in FY2020.

 

Overall in FY2021, net profit attributable to shareholders climbed 16 per cent to S$1.11 billion, from S$960.6 million in FY2020.

 

This translated to full-year earnings per share going up by 16 per cent year on year to S$2.35, from S$2.03. 

 

The group said the increase in net profit was due to more favourable financial market conditions and higher operating profit from the insurance business, which inched up 3 per cent to S$752.9 million from S$730.7 million. 

 

The full-year non-operating profit from the insurance business also returned to the black at S$289.7 million, from a non-operating loss of S$88.7 million in FY2020.

 

Gross premiums for the year went up 22 per cent to S$19 billion, from S$15.5 billion in FY2020.

 

Meanwhile, TWNS for FY2021 recorded an increase of 28 per cent year on year to SS1.97 billion from S$1.54 billion, driven by the strong contribution from all markets. NBEV ended the financial year 21 per cent higher at S$808 million, from S$669.5 million the previous year.

 

NBEV margin for the full year was down at 41 per cent from 43.4 per cent in FY2020, while NBEV margin for the fourth quarter of 2021 was up at 52.7 per cent, compared to 45.3 per cent a year earlier.

 

Tan said short-term savings products launched in the second and third quarters of 2021 resulted in " significantly higher sales" .

 

He also noted that TWNS for the company' s other channels in Singapore also rose to S$40.9 million for FY2021 from S$21.4 million a year earlier, with notable contributions from the Dependants' Protection Scheme (DPS). In April 2021, the company had become the sole insurer of the DPS, which is the term-life insurance scheme by the Central Provident Fund board. 

 

Looking ahead, the group expects underlying headwinds from Covid-19 will persist, while rising interest rates, growing inflation concerns and geopolitical tensions are likely key factors that may impact its performance.

 

Group chief executive Khor Hock Seng noted that a key challenge for 2022 would be to manoeuvre the volatile markets and to look out for customer behavioural changes.

 

" But despite the volatility, we are doing well and are more resilient, and we hope to continue this resiliency going forward," Khor said.

 

GREAT Eastern Holdings on Tuesday (Nov 2) posted a 26 per cent fall in net profit to S$213.3 million for the third quarter ended Sept 30, from S$287.9 million a year ago.

 

The insurance arm of OCBC said this was mainly because financial market conditions were not as favourable for Q3 2021, resulting in mark-to-market losses.

 

Meanwhile, operating profit rose 46 per cent to S$248.7 million, from S$170.2 million a year earlier, in line with higher profit from the insurance business.

 

However, non-operating profit came in at a loss of S$4.6 million for the quarter, swinging from a profit of S$51.2 million in the preceding year.

 

Profit from shareholders' fund fell to a loss of S$28.4 million, from a profit of S$74.9 million a year ago, due to mark-to-market losses in equities and collective investment schemes, the insurer noted.

 

Despite the negative impact from Covid-19 on sales in Malaysia and Indonesia, strong momentum for the business in Singapore led to a 29 per cent growth in total weighted new sales to S$555.2 million, from S$432.1 million last year.

 

The sustainable total weighted new sales performance was underpinned by the successful execution of the group' s distribution, product and digital strategies, the insurer said.

 

In addition, lower margins in Singapore also led to new business embedded value edging up 3 per cent to S$177.1 million, from S$171.3 million in the corresponding period last year.

 

Great Eastern group chief executive officer Khor Hock Seng pointed out that the group has continued to build on the momentum from the past 9 months to achieve robust growth in total weighted new sales and new business embedded value for the year thus far.

 

" Our priority remains to build resiliency into our businesses amid current and evolving Covid-19 challenges. This would entail delivering the right solutions to meet the needs of our customers, leveraging on our comprehensive suite of products, strengthening our distribution capabilities as well as sharpening our digital solutions and services.

 

" We will stay the course as we pursue a disciplined strategy to grow our franchise across our key markets in an increasingly uncertain and competitive business environment," he said.

will the da ma beat the gui lao this time in 2021?

 

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GREAT Eastern Holdings Great Eastern: G07 -0.09% on Monday posted a net profit of S$232.3 million for the second quarter ended June 30, 2021, 22 per cent lower than the S$297.5 million a year ago.

 

The insurance arm of OCBC attributed this to financial market conditions that were not as favourable for the quarter, which resulted in lower mark-to-market gains.

 

Operating profit for Q2 fell to S$148 million, down 20 per cent from S$185.1 million a year ago. Meanwhile, non-operating profit eased to S$34.9 million, down 2 per cent from S$35.6 million.

 

Profit net of tax from shareholders' fund fell to S$55.8 million, down 35 per cent from S$85.3 million the previous year.

 

Total weighted new sales rose to S$535.9 million, up 88 per cent from S$285.6 million from the previous year, which the insurer said was due to the low base effect experienced in the same quarter a year ago. (see clarification note)

 

New business embedded value climbed to S$186.7 million, up 58 per cent from S$118.4 million a year ago on the back of strong sales.

 

Meanwhile, net profit for the half-year ended June 30, 2021 more than doubled to S$669.9 million from S$331.4 million a year ago.

 

Earnings per share was S$1.42 for the first half, more than double the S$0.70 for the preceding year.

 

Total weighted new sales for the same period rose to S$919.5 million, up 57 per cent from S$584.7 million a year ago on the back of sustained sales momentum, particularly in Singapore. (see clarification note)

 

New business embedded value also climbed to S$368.9 million, up 43 per cent from S$258.8 million the year before.

 

Profit net of tax from shareholders' fund for the half-year rose to S$102.2 million, up 135 per cent from S$43.4 million a year ago.

 

The board declared an interim one-tier tax-exempt dividend of S$0.10 per ordinary share for the financial year ending Dec 31, 2021 that will be paid on Aug 31.

 

Great Eastern group chief executive officer Khor Hock Seng said that the strong performance in total weighted new sales and new business embedded value were due to the resilience of its business built from its strengths on the distribution, product and digital front.

 

" Looking ahead, challenges brought forth by the evolving Covid-19 situation are likely to persist. We will continue to strengthen our distribution and product offerings to deliver the right solutions to meet the needs of our customers," he said.