Adamjee posts lowest profit in a decade

KARACHI: Adamjee Insurance’s net profit plummeted 73% to Rs132 million in 2011, the industry giant’s lowest earnings in a decade.

Though the company’s core underwriting business posted a growth of 115% to Rs529 million, however, sharp rise of 147% in admin and general expenses to Rs1.6billion diluted the growth, according to Topline Securities analyst Farhan Mahmood.

A tax benefit saved the giant from sinking into the negative zone as the massive growth in admin expenses resulted in a loss before taxation of Rs42 million during 2011.

The company’s stock price fell 2.9% to Rs49.98 during trade at the Karachi Stock Exchange on Monday. Net premium grew by a modest 1.4% to Rs 7 billion while net claim declined by 2.4% to Rs4.7 billion.

Alone in the final quarter of October to December 2011, Adamjee posted a loss per share of Rs1.91 against profit of Rs2.83 per share in the same period last year.

Published in The Express Tribune, March 27^th, 2012.