Amana Insurance Losses Fell to RS25 mln during the 3Q, by 18%

Amana Cooperative Insurance Company recorded losses before zakat of SR25.11 million during the third quarter, compared to SR30.69 million during the same quarter of the previous year, a decrease of 18.16%.

This comes Amana Cooperative Insurance Co. announced on Tuesday its interim financial results for the period ending on 2021-09-30 (nine months).

As for the net profit of shareholders’ investments, it amounted to SR1.29 million during the third quarter, compared to SR1.41 million during the same quarter of the previous year, a decrease of 7.88%.

The net loss before zakat during the current period amounted to SR88 million, compared to SR23.5 million during the same period of the previous year, an increase of 274.48%.

The loss per share during the current period amounted to SR6.57, compared to a loss of 1.9 riyals during the same period of the previous year.

The reason for the decrease in net loses of Q3 2021 vs in Q3 2020 by SR 5,574K (-18.16%) is attributed from the improvement in net underwriting result by SR 10,102K (-50.28%) & other operating expenses by SR -4,528K (42.74%) in comparison for current quarter with same quarter of the previous year.

The reason for the decrease in net loses for Q3 2021 vs Q2 2021 by SR14,479K (-36.57%) primarily due to improvement in underwriting results loses by SR 14,843K (16.92%) and partly offset by decrease in net revenue by SR 826K (1.3%)

The reason for the increase in net loses during the current period compared to the previous period of the year is due to a increase in net claims incurred by 32.86%.

Some items have been re-classified to confirm to current period presentation.

“The Company’s accumulated losses as of 30 September 2021 are 95.04% (31 December 2020: 61.46%) of the Company’s share capital, and as of the same date, the Company’s solvency has reached -37.78% (31 December 2020: 45%). These events and conditions indicate a material uncertainty on the Company’s ability to continue as a going concern. However, the board of directors considered various strategic options, including capital restructuring, to ensure the Company’s going concern. Among such strategic options, on 15 November 2020, the Company has signed a Non-Binding Memorandum with Saudi Enaya Cooperative Insurance Co. (“”Enaya””) to assess the merger’s feasibility. It has signed a binding merger agreement with Enaya on 29 April 2021 to take the necessary steps to implement the merger under relevant applicable laws and regulations and has obtained the no-objection certificate for merger with Enaya Cooperative Insurance Co. from the General Authority of Competition “”GAC”” on 14 July 2021.

‘Further, on 23 May 2021, the Company reduced its share capital from SR 240 million to SR 130 million to absorb the accumulated losses after completing the regulatory requirements as per the Capital Market Law and its Implementing Regulations. Based on the above, the management is satisfied that the Company will continue as a going concern in the foreseeable future.”

In addition, procedure and instructions as a listed company, whose shares have been listed in the market, with accumulated losses amounted to 20% or more of their capital, will be applied.