Gulf Union Alahlia Cooperative profits reach SAR 28.4 million during Q1

Gulf Union Alahlia Cooperative profits reach SAR 28.4 million during Q1

Gulf Union National Cooperative Insurance Company recorded a net profit before Zakat during the first quarter of SAR 28.4 million, compared to a loss of SAR 24.3 million in the same quarter of last year. This came after the announcement on Sunday of the interim financial results for the period ended on 31.03.2023 (three months).

The gross written premiums in the first quarter amounted to SAR 159.4 million, compared to SAR 135.2 million in the same quarter of the previous year, an increase of 18%.

The total shareholders’ equity “without minority rights” in the current period amounted to SAR 443.3 million, compared to SAR 178.1 million riyals in the same period last year, a growth of 149%.

Earnings per share in the current period reached SAR 0.61, compared to a loss of SAR 0.99 in the same period last year.

The Company has adopted IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments), as endorsed in Saudi Arabia, starting 1 January 2023, with retrospective application, which has materially changed the presentation of the financial results for periods starting Q1 2023 onwards with the comparative periods restated under the new standards. As a result, the Company has only reflected the relevant financial information under the new standards in the above announcement. Items that are reported as “0” are no longer presented in the new financial statements under IFRS 17 and IFRS 9.

The following explanation will cover the relevant financial information reflected in the announcement above along with explanation on the new presentation of the financial results which are attached to this announcement:

The main reason of the profit before Zakat as following:

Decrease in Insurance service expenses to SAR 122 million in Q1- 2023 compared to SAR 166 million in Q1-2022.

Increase in Net Investment income to SAR 4.6 million in Q1-2023 compared to SAR 4.0 million in Q1-2022.

Increase in Other income to SAR 15 million in Q1-2023 compared to SAR 260 Thousand in Q1-2022.

The Company has adopted IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments), as endorsed in Saudi Arabia, starting 1 January 2023, with retrospective application, which has materially changed the presentation of the financial results for periods starting Q1 2023 onwards with the comparative periods restated under the new standards. As a result, the Company has only reflected the relevant financial information under the new standards in the above announcement. Items that are reported as “0” are no longer presented in the new financial statements under IFRS 17 and IFRS 9.

The previous quarter has been reported under the repealed financial reporting standards, IFRS 4 and IAS 39, the restated balances of the previous quarter are not included in the current quarter financial statements. Therefore, no explanation is provided due to the divergence of the reporting standards between the two quarters.

The Company has adopted IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments), as endorsed in Saudi Arabia, starting 1 January 2023, with retrospective application, which has materially changed the presentation of the financial results for periods starting Q1 2023 onwards with the comparative periods restated under the new standards. As a result, the Company has only reflected the relevant financial information under the new standards in the above announcement. Items that are reported as “0” are no longer presented in the new financial statements under IFRS 17 and IFRS 9.

Refer to the attachment for further details on the financial results items that are relevant under the newly implemented financial reporting standards for insurance companies.

1. Basic and diluted earnings (losses) per share for the three-month and nine-month periods ended 31 March 2023 and 2022 are calculated by dividing total loss for the period attributable to the shareholders by the weighted average number of outstanding shares during the period.

The weighted average number of shares has been retrospectively adjusted for the prior period to reflect the bonus element of the right issue as required by IAS 33, ‘Earnings per share’.

2. Accumulated losses of the company reached 20.66% of its share capital. Amount of accumulated losses was SAR 94.812 million while Share capital was SAR 458,949 million. The company will take the necessary measures of listed companies related to those who their losses reached 20% or more of their share capital.