Malath Insurance Records Losses before Zakat of SR33 mln during the 3Q

Malath Cooperative Insurance Company recorded on Sunday a loss before zakat of SR33.43 million during the third quarter, compared to a profit of SR1.3 million during the same quarter of the previous year.

This came after the Malath Cooperative Insurance Co. announced on Sunday its interim financial results for the period ending on 2021-09-30 (nine months).

As for the net profit from investments of shareholders’ funds, it amounted to SR4.74 million during the third quarter, compared to SR7.76 million during the same quarter of the previous year, a decline of 38.9%.

The net loss before zakat during the current period amounted to SR41.3 million, compared to a profit of SR10.6 million during the same period of the previous year.

The loss per share during the current period amounted to SR1.02 riyals, compared to a profit of SR0.01 during the same period of the previous year.

The reason for booking a loss (before Zakat) during the current quarter compared to profits in the same quarter of the previous year is due to:

1) An increase in net claims incurred by 21.60%, mainly due to the increase in net claims incurred for Motor by 80.88% in the current quarter compared to the same quarter of the previous year and increasing the technical reserves for Motor in particular.

2) Increase in policy acquisition costs and other underwriting costs

3) Decrease in investment income by 30.45%.

4) Other income decreased by 99%.

The reason for increase the net loss before zakat compared to the previous quarter is due to:

1) Increase in gross paid claims by 8.10%, and increase the net incurred claims by 18.91% , mainly in Motor by 32%.

2) Investment income decreases by 10% and other income decreases by 99% .

The reason for recording loss (before zakat) for the current period as compared with profits for the similar period of the previous year is:

1) Gross claims paid increased by 23.74%.

2) Net claims incurred increased by 12.47%, due to an increase in Motor and Medical by 15% and 11%, respectively.

3) An increase in the expenses of doubtful debts and other underwriting expenses.

Certain comparative figures have been reclassified to conform to the presentation of the current period. These changes have been made to better reflect the balances and transactions in the condensed interim financial information of the Company. The Company asserts that there is no financial impact of these re-classifications on Net Results From Insurance Operations and Net Income.

Total shareholders’ equity (there is no minority rights) as on SEP 30, 2021 amounted to 418,943 thousand riyals compared to 468,056 thousand riyals at the beginning of the year, with a decrease of (10.49) %, thus bringing the book value of the share to 8.38 riyals.

We would like to draw attention to the fact that the earnings per share for the third quarter 2021 and the third quarter of 2020 shown above has been calculated by dividing the net profit (loss) attributable to the shareholders (after zakat), with loss in the second quarter of 2021 (For the Nine-month period ended 30 SEP 2021) Value (51,053) thousand riyals, against a net profit of 720 thousand riyals for the same period last year, on the weighted average number of existing ordinary shares of 50,000.

The zakat expense charged for the current period a is 9,733 thousand riyals, and the zakat expense charged for the same period of the previous year was 9,900 thousand riyals.