Provati Insurance's profit drops 39% despite higher revenue
It also recommended a 12% cash dividend for its shareholders for 2022
Despite a higher revenue income, Provati Insurance Company Limited – a non-life insurance company – posted a 39% decline in its year-on-year net profit for the January to March quarter of 2023 due to the stock market slowdown.
From the first quarter, the total revenue income of the company increased by 32% to Tk33.19 crore from Tk25.10 crore compared to the same in 2022.
Its profit before investments and other income stood at Tk2.81 crore, which was Tk1.84 crore one year ago.
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In the first quarter, the investment and other income came down to Tk80 lakh from Tk4 crore a year ago.
The company also recommended a 12% cash dividend for its shareholders end of 2022.
Its earnings per share (EPS) was Tk0.73 and its net asset value (NAV) per share stood at Tk20.77.
Company Secretary Mohammed Serajul Islam said the net profit of the company come down due to the stock market slowdown although it made positive business during the quarter.
"The non-life insurer is also facing a global crisis like others, but we are doing better as the customers-based company", he added.
Basically, the global economic crisis, fuelled by the Russia-Ukraine war, appears to have hit the non-life insurance sector hard in a few quarters.
Industry people blame the sluggish business of insurance companies on a combination of factors – declining imports, a stock market slowdown, the resumption of agents' commissions, and higher reinsurance costs.
Usually, general insurers provide services to their clients in the following areas: fire, marine, engineering, motor, and miscellaneous.
Provati Insurance started its operation in 1996 and was listed on the stock exchanges in 2009.
The company has fixed its annual general meeting (AGM) on 2 August and the record date is also fixed on 19 June this year.
As of 30 April 2023, sponsors and directors jointly held 30.03%, institutions 13.69%, and the general public 56.28% shares in the company.
The last trading price for each of its shares on the Dhaka Stock Exchange was Tk58.90 on Thursday.
