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Kenya: Kenya Re Posts Sh966m Profit
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The Nation (Nairobi)
30 April 2008
Posted to the web 30 April 2008
Joseph Bonyo
Nairobi
Kenya Reinsurance posted a Sh966 million pre-tax profit in the year ended December 31, 2007 since listing at the stock market.
However, this was after deducting a one-off staff rationalisation cost of Sh197 million. This was a 21.3 per cent growth compared to the Sh796 million profit it recorded over the same period in 2006.
It was the company's first profit announcement since it was listed at the Nairobi Stock Exchange last August.
Aggressive marketing and new business boosted profit at the firm, the company said. "Our marketing practices have paid off, resulting in increased business ... around the region as well as increased shares in our existing companies," said managing director, Eunice Mbogo.
Some of the business the corporation acquired during the period included Mundial Seguros of Angola, UAP Uganda, and New Sudan Insurance Company. The corporation also improved its dealings with broker, including Ashford Page Gems of London. The state corporation was listed at the Nairobi Stock Exchange in August last year, when the government sold 40 per cent of its stake in the company. It remains the majority shareholder, with 60 per cent of the stock held by Treasury.
In the financial period under review, the total assets grew by 14 per cent from Sh12.9 billion in 2006, to Sh14.7 billion. Shareholders' funds also went up by 15 per cent from to Sh7.3 billion. "The growth in assets has been enhanced by renewed efficiency in rental collection, asset allocation and improved collection from cedants," added Mrs Mbogo.
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However, to sustain the growth momentum, the firm also reiterated its plans to venture into French speaking parts of West Africa. The strategy that will include setting up of liaison office in the region, estimated to cost the firm Sh10 million annually. To cut down costs, the managing director said that plans were already in place to pull out of the marine business and sell prime properties in Mombasa that are, however, making losses.
Addressing an investor briefing in Nairobi, Tuesday, Mrs Mbogo noted that Kenya Reinsurance would look into new business models. On their programme this year is the introduction of new product, including a political risk business, commercial mortgage and offshore investments.
Due to the performance described by the board of directors chairperson Mrs Nelius Kariuki as a landmark, the firm will pay shareholders Sh0.36 per share as a first and final dividend, pending approval at its annual general meeting to be held later this year.
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