Great Eastern reports 4Q18 net profit fell 68 percent, hurt by market volatility

Great Eastern building at Changi in Singapore; taken August 2018.Great Eastern building at Changi in Singapore; taken August 2018.

Great Eastern reported on Wednesday its fourth quarter net profit fell 68 percent on-year to S$136.9 million amid lower valuations for investments due to market volatility in the period.

The investments also faced a high base comparison after “exceptionally high gains” in the year-ago period, it said in a filing to SGX before the market open on Wednesday.

“2018 was a challenging year. Interest rate hikes, coupled with trade and geopolitical tensions have resulted in volatile capital and financial markets, CEO Khor Hock Seng said in the statement.

“Looking forward, while concerns over market volatility and slowing global economic growth are present, we remain positive on the long term growth potential of the markets we operate in,” Khor said, noting that the company recently acquired a general insurance company in Indonesia.

Operating profit from the insurance business rose 5 percent on-year to S$171.6 million in the quarter, but non-operating profit from the segment fell 86 percent on-year to S$11.4 million, Great Eastern said.

“Operating profit from insurance business continued its good growth momentum, underscoring the strength of our core business fundamentals,” the filing said, adding it was driven by both the Singapore and Malaysia business.

Profit from shareholders’ fund’s investments swung to a loss of S$45.4 million for the quarter, from a year-ago gain of S$182.7 million, it said.

Total weighted new sales fell 30 percent on-year in the quarter to S$330.2 million after a year-ago product campaign was “very well received,” the filing said.

Income for the quarter ended 31 December fell 66 percent on-year to S$1.90 billion, it said.

For the full year, net profit fell 29 percent to S$740.7 million, while income fell 30 percent to S$12.10 billion, the insurer said.

Great Eastern declared a final dividend of 50 Singapore cents a share, which including a 10 Singapore cent interim dividend, brought the total to 60 Singapore cents for the year. That compared with year-ago total dividends of 70 Singapore cents.

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