Continental Re Insurance Plc December 2016 Financial Summary

Legal form

Continental Re was incorporated as a private limited liability Company on July 24th, 1985. It commenced business as a general reinsurer in January 1987 and became a composite reinsurer in January 1990. It was subsequently registered by the National Insurance Commission (NAICOM) as a reinsurer on November 14th, 2007. The Company was converted to a public limited liability Company on March 27th, 2000. Its shares were officially listed on the Nigerian Stock Exchange on May 30th, 2007.

Principal activity

The Company is principally engaged in the business of reinsuring all classes of insurance business, including Life, Fire, Engineering, Bond, General Accident, Marine, Aviation, Motor, Liability and Energy within and outside Nigeria. Its product mix includes a full range of treaty and facultative reinsurance services.

The Company is a pan-African reinsurance Company operating in more than 50 African countries with four regional offices in Lagos (Nigeria), Douala (Cameroon), Abidjan (Cote d’ivoire), Tunis (Tunisia) and two subsidiaries in Nairobi (Kenya) and Gaborone (Botswana). The Company also has 5 percent shareholding each in Aveni Reinsurance and Uganda Reinsurance.

This is the first company in the Insurance Sector to come out with its result. Find below the summary of the result:

12 Months Report CONTINENTAL RE INSURANCE PLC
	2016 N'000	2015 N'000	change	Year End
Gross Income	22,406,048	19,738,040	14%	December
Profit before taxation	4,651,687	3,835,712	21%
Profit for the period	3,118,635	2,514,962	24%
Issued Shares (Units)	10,372,744,314	10,372,744,314
Basic Earnings Per Shares (Kobo)	28.00	19.00	47%
Last total dividend paid (Kobo)	14.00	12.00	17%

The Quarter on Quarter performance of the Company:

Revenue

Q1:#5,539,749,000

Q2:#6,385,066,000

Q3:#5,589,010,000

Q4:#4,892,233,000

PAT

Q1:#660,799,000

Q2:#1,586,899,000

Q3:#1,503,609,000

Q4:(#632,672,000)

The above summarized the quarter on quarter performance. With an average of  #5,601,514,500 per quarter the gross revenue seems to be moderate for its kind of business and less volatile even against the economic situation that prevailed in 2016.

The PAT was supported by the off the curve gains from Foreign Exchange gains, but however slowed down by the dismal performance at Q4 with a loss of #632,672,000. The average return for 2016 was #779,658,750. In all it was not a bad performance in a country where the insurance culture is still at the lowest ebb.

A closer look at the financials show that two major investors owned 64.83% of the total issued and fully paid shares of the Company. The balance 35.17% is owned by 6,054 shareholders scattered  around the Market. The total unclaimed dividend as at 31st December 2016 stood at N385,489,574. 

Further break down of the Financial performance revealed that Forex gain grew by unprecedented 769.12%. This reflected in the half year and 9 months results of the firm. Also worthy of note is the fair value gain that was 323.56% above what it was in 2015. Credence should be give to the Company for the management of its administrative expenses, the company saved 36.78% against what was spent in 2015.

However the Company would have done  better but for the impairment of assets that grew by 263.48% and income tax expense that grew by 98.37% in 2016 compare to 2015.

At the release of the result today with a yield of 13.20% just above the current FGN Savings bond returns the Market hugged it. How this bullish condition will extend into the week will leave much to be desire. 

But before the Market start taking profits, let the stock enjoy the rally!!!