Walaa Insurance Records Losses before Zakat of SR112.8 mln at End of 2021

Walaa Cooperative Insurance Company recorded losses before zakat of SR112.79 million during the year 2021, compared to a profit of SR72.63 million during the year before last.

This came following Walaa Cooperative Insurance announcement on Wednesday of the financial results for the period ending on 31.12.2021 (12 months).

The net investment profits of shareholders’ funds during the current period amounted to SR40.90 million, compared to SR15.15 million during the same period last year, an increase of 170%.

The loss per share during the current period amounted to SR1.89, compared to profits of SR0.82 during the same period of the previous year.

The reason of the increase (decrease) in the net profit during the current year compared to the last year is:

Net Loss before Zakat and Income Tax for the year is SR112.80 million as compared with net income before zakat and income tax amounting to SR72.63 million for the comparative year. the reasons of net loss before zakat & income tax are mainly associated with increase in net claims and other benefits incurred by SR411.74 million 73.87%, increase in other underwriting expenses by SR73.60 million 227.40%, increase in other technical reserves by SR21.53 million 95.81%, decrease in other underwriting income by SR7.58 million 67.61%, increase in policy acquisition costs by SR11.89 million 24.65%, increase in allowance for doubtful debts by SR9.04 million 110.89%, increase in general & administrative expenses by SR9.05 million 6.38%. the increase in costs and expenses is partially offset with decrease in additional premium reserves by SR38.00 million 180.59%, increase in net earned premiums by SR 244.92 million 30.74%, increase in reinsurance commission by SR 35.12 million 85.55%, increase in commission & investment income by SR33.35 million 185.65%.

The company added that the joint independent auditors’ report on the annual financial statements states that the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”) that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”).

It also added that certain comparative figures have been reclassified to conform to the presentation of the current year. These changes have been made to better reflect the balances and transactions in the financial statements of the Company. The Company asserts that there is no financial impact of these re-classifications on net results from insurance operations, net income, retained earnings, and equity.

The Loss/Earning Per Share is calculated on loss/profit after zakat and income tax for the year. the loss per share for the current year is SR1.89 versus earnings per share of SR 0.82 for the comparative year, which is calculated based on the weighted average number of ordinary shares outstanding during the year. the total of shareholders’ equity (there are no minority rights) for the current year amounted to SR810,773 thousand compared with SR916,294 thousand for the comparative year ended 31 December 2020, which reflects a decrease of 11.52%. The accumulated loss as at the end of the year is SR40,750 thousand which is 6.30% of the paid-up capital. The total comprehensive loss attributable to Shareholders for the current year is SR 105,521 thousands compared with total comprehensive income attributable to shareholders amounting to SR 55,462 for the comparative year.