Great Eastern's Q2 earnings plunge 63% from a year ago

SINGAPORE - Great Eastern Holdings reported on Wednesday (July 27) a 63 per cent fall in its second quarter net profit, from $277.7 million a year ago to $102.2 million.

This also represents a 60 per cent dip in earnings for the first half of the year to $199.1 million from $498.2 million a year ago.

Lower profit was attributed to a $18.7 million loss on disposal of the group's Vietnam subsidiary, unfavourable financial markets and low interest rate environment.

Net profit from Q2 last year was also higher as it included a $119.9 million gain on disposal of investments in New China Life Insurance Company Ltd.

Gross premiums for Q2 ending June 30 2016 was at $2,276.3 million, up 25 per cent from $1,823.0 million a year ago.

The insurance company said that profit from its insurance business fell 16 per cent to $116.2 million in Q2, mainly because of unrealised losses from the widening of credit spreads and sharp decline of the long term interest rates.

Profit from general insurance was up 22 per cent at $8.4 million in Q2, compared to $6.9 million a year ago due to a release of reserves in Malaysia.

Great Eastern chief executive officer, Khor Hock Seng, said: "Our positive Q2-16 performance is a direct result of building upon, and even surpassing, our Q1-16’s sales momentum for our major markets, Singapore and Malaysia. While we maintain our focus to grow our core markets, we will increase efforts to build our business in Indonesia".

He added that the group remained positive on long term prospects of its insurance business in Southeast Asia, adding that he was confident the firm would "be able to ride through the global macroeconomic uncertainty with our strong fundamentals and robust financial position".

The board said an interim dividend of 10 cents per share, unchanged from a year ago, will be paid on Sept 2.

ljessica@sph.com.sg