Prima Reinsurance Plc (LUSE: PRIMA RE) reported a 39% year-on-year decline in net profit to K1.9 million in financial year (FY) 2014. Earnings per Share (EPS) came in at K0.06 (K0.23 in 2013):
The decline in net profits was driven by:
- 30% increase in retrocession costs
- 29% increase in expenses
- Global increase in commission rates
Pre-tax profit dropped by 23% year-on-year to K3.5 million in FY 2014.
Prima saw gross written premium growth of 19% year-on-year to K30.4 million in FY 2014:
Growth was primarily driven by increased business in foreign markets. This was despite softening in the global reinsurance market, falling underwriting rate in the domestic market and a competitive environment.
Prima’s stock price closed the year at K2.91, down 3% in 2014. The company had their credit rating revised upward to A Minus (A-) by Global Credit Rating (GCR) during FY 2014.
No dividend was recommended for FY 2014.
In their outlook for 2015, the company said:
The Company will continue its aggressive marketing drive to consolidate its position in domestic and existing markets as well as to source new markets and this is expected to grow the top-line significantly.
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *