Great Eastern Holdings, a member of the OCBC Group, posted earnings of $341.3 million for the 4QFY2020 ended December, 19% higher than earnings of $287.0 million for the period a year ago.
The higher earnings for the quarter was buoyed by the higher total weighted new sales (TWNS) and one-off positive tax impact arising from the finalisation of prior years’ tax assessment.
The group’s earnings for the FY2020, however, fell 4% to $960.6 million from earnings of $1.00 billion for the FY2019. Great Eastern’s management attributes the overall lower earnings for the year to the lower valuation of its investments due to a less favourable financial market condition for the year, particular in 1QFY2020 compared to the same period a year ago.
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4QFY2020 and FY2020 TWNS grew 34% and 23% y-o-y to $527.6 million and $1.55 billion respectively on the back of strong 2HFY2020 performance across all markets, in particular the group’s Singapore and Malaysia businesses.
New business embedded value (NBEV) for the quarter and full-year grew 42% and 10% y-o-y to $274.8 million and $670.2 million respectively.
Operating profit from insurance business for the 4QFY2020 fell 56% y-o-y to $76.5 million.
Non-operating profit from insurance business for the 4QFY2020 fell 25% y-o-y to $47.6 million.
4QFY2020 profit from shareholders’ fund surged 318% y-o-y to $228.1 million
For the FY2020, operating profit for the insurance business grew 11% y-o-y to $732.2 million due to higher contribution across its core markets.
However, non-operating profit from insurance business in FY2020 plunged to a $90.2 million loss from the $84.6 million profit in FY2019 due to mark-to-market losses from unfavourable market conditions in 1QFY2020.
SEE: Great Eastern Holdings' 3Q earnings rise 40% to $287.9 mil on higher valuation of investments and improved market conditions
Consequently, profit from shareholders’ fund for the FY2020 increased 25% y-o-y to $346.4 million due to higher profit in 4QFY2020 and contributed by the one-off tax credit.
2HFY2020 earnings per share (EPS) and FY2020 EPS stood at 1.33 cents and 2.03 cents respectively.
Cash and cash equivalents as at end-December stood at $9.65 billion. Embedded value for FY2020 rose 12% y-o-y to $36.82 while net asset value rose 9% y-o-y to $19.78.
The board has declared a final dividend of 50 cents per share, bringing the total dividend for FY2020 to 60 cents per share. The final dividend will be paid on May 5.
“The group’s solid distribution capabilities and innovative product strategy, supported by the focused execution of our digital and technology infrastructure initiatives have put us in a position of growth this year,” says Great Eastern’s group CEO Khor Hock Seng.
“Staying true to our promise to help our customers protect themselves against uncertainties, we seek solutions that are relevant to the challenges of today and have launched plans during the year to cover long-term care and disability, protection, saving and wealth accumulation needs of our customers,” he adds.
“In the near future, while uncertainties are likely to persist, we remain positive on the long-term growth potential of the markets we operate in.”
Shares in Great Eastern closed 7 cents lower or 0.3% down at $20.50 on Feb 22.