Sri Lanka’s Janashakthi Plc June quarter losses widen
ECONOMYNEXT – Losses at Sri Lanka’s Janashakthi Plc, which has interests in insurance and finance, deepened to 441.2 million rupees in the June 2018 quarter, up from a loss 56.5 million rupees a year earlier, after the sale of a life insurer and re-structuring costs.
The group reported a 44.7 rupee loss per share in the June quarter. The share last traded at 97.71 rupees.
"The reduction in total income was due to the disposal of Janshakthi General Insurance Limited during the last quarter of financial year 2017/18," Chief Executive Ramesh Schaffter told shareholders in the interim financial results filed with the Colombo Stock Exchange.
"Overhead expenses grew primarily due to one-off payments related to the divesture of Janashakthi General Insurance Limited and re-structuring," Janashakthi Insurance said in an August filing.
Gross written premium fell 80 percent from a year earlier to 764.6 million rupees in the June quarter, premiums ceded for reinsurance fell 96 percent to 31.3 million rupees leading to net earned premium fell 74.5 percent to 733.2 million rupees.
Insurance claims and benefits paid fell 83.5 percent to 294.3 million rupees, underwriting and net acquisition costs decreased 57 percent to 211.5 million rupees and change in contract liabilities for life insurance fell 18 percent to 334.3 million rupees, resulting in underwriting losses contracting 151 percent from a year ago to 107.3 million rupees in the June quarter.
"Janashakthi Insurance PLC has over the last year been restructuring its life distribution and is poised for growth,"Schaffter said.
"The exit from the general insurance business allows Janashakthi Insurance PLC to review its branch network and re-align its presence in the marketplace," he said.
Interest income fell 8.5 percent to 776.4 million rupees, and net interest expenses decreased 11 percent to 479.2 million rupees leading to net interest income growing 4.2 percent to 297.2 million rupees.
Other operating income fell 38 percent to 525 million rupees and operating expenses including administrative and personnel costs declined 18.3 percent 767 million rupees.
Group impairment provisions grew 35.8 percent to 141.5 million rupees.
Orient Finance reported a 21 million loss in the June quarter with revenue falling 6.3 percent from a year
earlier to 827 million rupees.
Orient Capital reported a 0.06 million rupee profit in the June quarter, compared to a 24 million loss a year earlier despite revenue falling to 0.2 million rupees in the quarter from 2.1 million rupees a year earlier.
Total group assets fell to 6.9 percent from the previous quarter to 40.5 billion rupees at end June 2018. (COLOMBO, 10 September 2018)