KUALA LUMPUR: LPI Capital Bhd’s net profit eased 3.4 per cent to RM65.74 million in the second quarter (Q2) ended June 30, 2018 from RM68.06 million recorded in the same quarter a year ago.
In a filing to Bursa Malaysia, the general insurance company said this was due to lower contribution from the investment holding segment, which slipped 109.1 per cent from the previous corresponding quarter, mainly due to the non-recurring gains of RM1.5 million from the sale of equity investment in 2017.
Besides that, LPI Capital said its wholly-owned Lonpac Insurance Bhd had registered a 1.1 per cent lower gross premium income to RM303.8 million from RM307.2 million previously.
“The Malaysian general insurance industry continues to see stiff competition in the market with Phase 2 of market liberalisation in full force as players are taking advantage of the liberalised environment to build their respective market share.
“The new competitive environment has caused profit margin to compress and LPI Group has worked to compensate the lower margin with a bigger market share,” the company said.
Its revenue in Q2 increased marginally to RM353.05 million from 352.71 million, mainly driven by growth in investment income of 12.9 per cent or RM1.8 million from its general insurance segment.
For the six-month period, LPI Capital’s net profit decreased marginally to RM138.24 million from RM138.63 million, while revenue increased 4.8 per cent to RM734.05 million from RM700.35 million.
LPI Capital founder and group chairman Tan Sri Teh Hong Piow said the Malaysian economy had so far remained resilient.
It is confident about the second half year of 2018, despite the global economic environment haveing turned volatile recently arising from trade conflicts.
“LPI Group will continue to implement its prudent business strategies to further strengthen its market position and improve its performance,” he said.
Teh announced that the board of LPI Capital had declared a first interim dividend of 26 sen per share, in view of the satisfactory performance.
He said the first interim dividend payment which will amount to RM103.6 million was 15.6 per cent higher than the RM89.6 million first interim dividend that was paid in August 2017.
The interim dividend payout represents 75 per cent of the group’s net profit attributable to shareholders.