Pragati Insurance’s profit soars 78% during pandemic

Pragati Insurance Limited has posted a whopping 78 percent increase in its profit during the April-June quarter of 2020 – despite the novel coronavirus-led countrywide shutdown having suspended regular economic activities during the time.

The company's earnings per share (EPS) soared to Tk1.03 during the second quarter of the financial year.

An official of the company said, "The Insurance Association and Insurance Development and Regulatory Authority (IDRA) Bangladesh have undertaken some initiatives – including the promise that none will take over the business from others. On top of that, we have been successful in stopping the unethical commission system."

Preferring anonymity, the official told The Business Standard that these two reasons contributed to the soaring profit. "That is why our business has increased this year despite the novel coronavirus outbreak," he added.

Pragati Insurance Ltd published its quarterly financial report on Thursday evening. On Sunday, the company's share price increased by 14 percent to Tk41.50 on the Dhaka Stock Exchange (DSE).

In the first half of the current year, the company reported its EPS at Tk2.05, which is 44 percent higher than the same period last year. Meanwhile, the net asset value per share stood at Tk51.89 and the net operating cash flow per share was Tk4.56 during the first half of this year.

Another insurer, Sonar Bangla Insurance, also posted higher growth in the second quarter amid the pandemic.

However, most of the general insurance companies declared lower profits in the period due to Covid-19.

At a board meeting Thursday, Pragati Insurance recommended a 22 percent cash dividend to its shareholders for the last financial year ended on December 31, 2019.

To finalise it, the company will arrange an annual general meeting on next September 23 online. The record date has been set for August 24.

Last year, the company posted EPS of Tk3.19, which is six percent higher compared to the previous year. In 2018, the company paid 13 percent cash and seven percent stock dividends to its shareholders.

Pragati Insurance was listed with the Dhaka Stock Exchange in 1996 and its paid-up capital is Tk65.59 crore. The company's closing price of each share stood at Tk41.20 Sunday.

Out of its total shares, sponsors and directors of the company jointly hold 38.10 percent, while institutional investors have 29.18 percent and general investors own 32.72 percent.