Great Eastern Holdings, a member of the OCBC group, reported earnings of $297.5 million for 2Q20 ended June, 76% higher than the $169 million posted a year ago.
Its management attributes the quarter’s performance to higher operating profit driven by improved contribution from its core markets and higher valuation of investments as a result of improved financial markets during the period.
The latest set of results brings the group’s 1H20 to $331.4 million, 35% down from the $511.7 million in 1H19 due to the “unfavourable” market conditions in 1Q20.
Total weighted new sales (TNWS) for 2Q20 fell 4% y-o-y to $286.1 million due to the restricted business activities amid Covid-19.
New business embedded value (NBEV) for 2Q20 declined 28% to $109.1 million.
Operating profit from insurance business rose 16% y-o-y to $185.7 million for 2Q20, and non-operating profit registered profit of $35 million from the loss of $23.7 million a year ago.
Accordingly, profit from shareholders’ fund surged 133% to $85.3 million y-o-y in 2Q20.
For 1H20, operating profit rose 57% y-o-y to $484.3 million, while non-operating profit plunged to losses of $187.8 million from the $52.2 million profit a year ago.
Profit from shareholders’ fund in 1H20 fell 73% y-o-y to $43.4 million due to unfavourable market conditions in 1Q20, contrasted by higher mark-to-market gains in equities in 1H19.
Great Eastern’s board has declared an interim dividend of 10 cents for FY20, which is to be paid out on Aug 26.
“Sales in our core markets for Q2-20 were affected by the tighter movement restriction measures implemented due to COVID-19,” says Group CEO Khor Hock Seng.
“Bancassurance channel was significantly impacted as sales activities, which were largely conducted at bank branches were restricted. Our agency force in Singapore was able to adapt swiftly and transition to operate digitally on the back of the major digital and technology infrastructure initiatives that we have embarked on in the past two years,” he adds, saying that the digital transformation helped to cushion the impact of restricted sales activities.
Looking ahead, Khor believes the global economic uncertainty is “likely to persist”. He also expects the economic outlook to be “challenging”, volatile financial markets, and the low-interest-rate environment to continue, which could impact the performance of the group.
Shares in Great Eastern Holdings closed 3 cents lower, or 0.2% down, at $19.37 on July 27.
