Background
Staco Insurance Plc offers a wide range of insurance products. The company’s products include automobile, money, fidelity guarantee, travel, and workman’s compensation insurance.
The company has 6.14 billion shares outstanding, with shareholder funds standing at N2.68 billion at the end of September 2013.
Financial Performance for the period Q3 13
Staco insurance Plc for the nine months period through September 2013 showed gross premium income decline by 25.97 percent y/y to N4.56 billion from 6.16 billion recorded in the corresponding period of 2012.
Net insurance premium earned for the period Q3’13 shrank by 31.42 percent to N3.84 billion as against N5.60 billion in Q3’12, while premium ceded to reinsurance climbed by 28.76 percent to N721.75 million from N560.50 million recorded in Q3’12.
The drop in top line performance continued as Net underwriting income slid by 30.70 percent y/y to N3.95 billion in the third quarter of 2013 compared to N5.70 billion recorded same period prior year of 2012.
Net benefits and claims paid in the period under review dipped by 16.81 percent to N1.93 billion as against N2.32 billion Q3’12, while gross benefits and claims paid were up 9.52 percent y/y to N1.38 billion in Q3’13 from N1.26 billion in Q3’12.
Profit before tax (PBT) for the nine month period through September 2013 surged by 149.64 percent y/y to N390.16 million compared to N156.54 million in the same period of the prior year (Q3’12)
In the period under review, operating and administrative expenses grew by 13.07 percent to N1.71 billion from N1.51 billion in the same period of the prior year (9M12) hence expenses to premium margin climbed to 37.5 percent in 9M12 as against 24.57 in 9M12.
The impressive performance in bottom line performance has reflected positively on Return on equity (ROE) which climbed to 12.87 percent in 9M13 from 2.28 percent recorded in 9M12.
Return on Assets followed similar growth trajectory as it also jumped to 4.51 percent in the period Q3’13 compared to 1.31 percent in the corresponding period of Q3’12.
Staco’s total assets were down 19.47 percent year on year (YoY) to N7.65 billion as against N9.50 billion recorded in the corresponding period of Q3’12.
Total equity for the year ended December (FY13) dropped by 51 percent to N2.65 billion from N5.46 billion as at 2013FY. The insurer’s revenue reserve showed a debit figure of N2.95 billion in the review period which explains the slid in total equity.
Property plant and equipment in the review period dropped slightly by 1.57 percent to N1.97 billion compared to N2.0 billion in the corresponding period of 2012.
There was N330 million from the sale of investment in the third quarter of 2013 while interest received from investments were N66.05 million in the same period.
Cash and cash equivalent for the nine month period through September 2013 increased by 75.40 percent y/y to N1.61 billion from N922.61 million in 9M12, while financial assets reduced by 71.23 percent y/y to N1.7 billion in Q3’13 from N483.04 million in Q3’12.
Share Performance and Outlook
The company’s share price closed trading at N0.50k on the floor of the Nigeria Stock Exchange on March 17th2014.
It also on the same day had a market capitalization of N3.07 billion.
BALA AUGIE
