Real Insurance Company of Malawi Limited will not pay out dividend in the half-year ended June 30 2014 despite posting a 107 percent increase in after-tax profit to K27.6 million.
For some time now, the Malawi Stock Exchange (MSE) listed firm has not been able to pay out dividend due to cash flow problems.
The company, whose shareholders changed to British American Investments Company Kenya Limited (Britam), listed on Nairobi Securities Exchange (NSE), has registered a 50 percent growth in gross written premiums to K1.5 billion from K1 billion.
However, the insurance firm has decried the growth in expenses by 49 percent to K322 million from K216 million largely due to commodity prices increases in the year.
“Claims still continue to pose challenges, especially motor and their effect compromise targeted level of profitability in order to improve capitalisation of the company,” said a statement jointly signed by chairperson Thom Kanyuka and one of the directors, Rex Harawa.
Real’s management will continue to monitor and control expenses to achieve higher levels of profitability, according to the statement.
The company, whose assets have jumped 47 percent to K2 billion from K1.4 billion, said its strategy which focuses on growth in profitability and market share continues to bear fruit.
Its takeover by Britam, said the statement, is a positive development because it position the company to get strong support and enjoy synergies from the company which has interests in life insurance, property and casualty insurance, asset management, property and banking.
“The board and management will capitalise on this new relationship to attain sustainable growth in shareholder’s value,” the statement said.
Real Insurance, with 250 million shares on issue, had its share prices trading at K2.30 per share on the MSE yesterday.
