Great Eastern profits up 31% to $511.7m for H1

Higher investment income offset lower premium sales.

Great Eastern Holding’s net profit soared 31% YoY to $511.7m in H1 2019 from $390.5m last year, an announcement revealed. However, Q2 profits plummeted 29% YoY to $169m from $237.6m last year.

Meanwhile, operating profit declined by 2% YoY to $311.7m in the first half of the year from $319.6m previously, whilst Q2 operating profit inched up by 3% YoY from $156.7m to $161.7m.

Also read: Great Eastern Holdings' profits soar 124% to $342.7m in Q1

Gross premiums decreased 12% and 4% to $2.9b and $5.5b in Q2 and H1, respectively from $3.3b in Q2 2018 and $5.7b in H1 2018, attributed to lower single premium sales in Singapore.

Net investment income increased to $708.2m in Q2 and $1.3b in H1 from $703.8m in Q2 2018 and, $1.8b in H1 2018, respectively, mainly due to higher interest income, offset by lower dividend income.

Fees and other income decreased to $18.8m for Q2 and $36.7m for H1, respectively from $19.2m and $40.1m over the same periods in the previous year, which Great Eastern said was due to lower fee income from the Group’s asset management arm, Lion Global Investors Limited.

Higher expenses offset the higher total income in Q2, which rose by 42% YoY to $4.4b from $3.1b last year. In particular, change in insurance contract liabilities rocketed 135% YoY from $897.7m to almost $2.11b, which Great Eastern said is a result of a decline in the discount rate used to value the insurance contract liabilities. Insurance contract liabilities for the first half of the year soared to 329% to $4.8b from $1.1b last year.

Exchange differences also accounted for losses of $6.1m in Q2 and $21.2m in H1, mainly from USD denominated investments. Management and other expenses increased to $148.5m for Q2 from $103.4m and $290.3m for H1 from $236.0m due to higher staff-related expenses and professional fees.

Great Eastern will pay a dividend of 10 cents per ordinary share on 30 August.