Botswana Insurance Holdings Limited (BIHL) Group last Thursday announced an impressive increase in earnings during the year 2013.
The announcement came as part of the abridged audited Group results ended 31 December 2013, presented to stakeholders and media at a results announcement breakfast at Gaborone Sun.
The Group’s year end results were largely driven by a substantial growth in new business for the period under review.
The value of new business increased by 10% from the previous year, standing at P109.7 million during the year 2013 off the back of significant growth in individual life volumes and changes in mortality assumptions.
“The financial results and the operational progress made by the Group during the last financial year continues to be right on track. It illustrates how we can continue to generate profitability from across the Group whilst at once implementing the framework and business discipline necessary for sustainable growth. We will continue to build upon these achievements and focus on our key twin strategies of growth and profitability,” said Batsho Dambe-Groth, Chairperson of BIHL.
Group profits before tax grew to P579,394,000, 19% up on the P485,331,000 achieved in the previous year within the same period. Operating profit increased by 19% to P277.3 million, with operating profit by the life business alone increasing by 15% due to good operational earnings from all the business lines. Core earnings increased by 15% to P310 million, while profit attributable to equity holders within the period under review increased by 26% to P492.5 million.
The Group registered profits after tax for the year of P494,773,000 which was 25% higher than P394,395,000 achieved in 2012. Although expenses at P532,252,000 were 5% higher than the P508,637,000 recorded in 2012, this was primarily due to the Group’s increased selling expenses. Overall, Group expenses were well maintained in line with the continued strategy to manage expenses.
Embedded value, which sees the estimate value of the Group excluding the value attributable to minority interests and goodwill attributable to future new business, saw a significant increase in the period under review.
Embedded value increased by 21%, from P2,700,868 at the end of 2012 to P3,260,161 at the end of 2013.
This saw a resultant increase in return on embedded value, from 19% in 2012 to 24% in 2013.
The embedded value was positively affected by good operating earnings, especially the life business, and good investment returns which are in line with global market performance for the reporting period.
The embedded value allows for P98.4 million dividends paid during the period.
Basic earnings per share for ordinary equity holders stands at 183 thebe from 146 thebe in the previous year, an increase of 25%. Diluted earnings per share, moreover, increased by 25%, from 145 thebe in 2012 to 181 thebe in 2013.
The BIHL Board, noted Hinchliffe, has resolved to award a final normal dividend of 35 thebe per share (gross of tax).
“In particular, both Botswana Life and Bifm’s year was exceptional, with the Bifm group having generated an excellent set of results for the full year 2013 and the business performing above the prior year. The good performance is on the back of strong assets under management, a position increased by new mandates won in the latter part of 2012. Further contributing to the results is the significant improvement in business operations from companies within the Bifm group and Botswana Life, showing robust and healthy performance in the acquisition of new business under the Individual Life division, an increase of 26% from the prior year.
As part of the overall cost management strategy undertaken within the Group, Botswana Life did an exceptional job in this arena.
Interventions such as the launch of the LifeRewards Prepaid card, which was rolled out to our branch network in September 2013, made significant strides in the implementation of our strategic imperatives, as articulated in the Sekgantshwane 2014 Strategy,” noted Dambe-Groth.
BIHL Group has noted that as part of its strategy to become a fully-fledged financial services operation, all the BIHL Group of companies have been active and busy with key initiatives that have proven to be fruitful in the period under review.
Looking into the future, the Group is expected to continue to build upon robust results and achievements during the year 2013, with a focus on key twin strategies of growth and profitability and taking into consideration uncertainty in the global markets.