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Great Eastern's Q2 net profit up, boosted by partial sale of interest in New China Life
Great Eastern Holdings reported on Tuesday that for the second quarter of 2015, its net profit rose 14 per cent to S$277.7 million compared to a year ago. Net profit for the six month period to end June was up 5 per cent, at S$498.2 million.
The improvement was mainly contributed by the gain of S$119.9 million (post-tax) from the sale of part of the group's investment in New China Life.
Operating profit of S$132.2 million for Q2 was 7 per cent lower than the same quarter last year when profit was boosted by a release of tax provisions from the investment-linked fund in Singapore. Excluding this, operating profit for Q2-15 was higher compared to a year ago, contributed by lower claims from the non-participating fund in Singapore.
On a half year basis, operating profit of S$282.9 million was comparable to the same period last year.
Great Eastern achieved S$203.9 million and S$410.5 million in total weighted new sales for Q2 and 6M, respectively. These were 4 per cent and 5 per cent lower compared to a year ago. The decline for the quarter was mainly caused by lower sales of single premium participating products through the agency channel in Singapore.
In terms of new business embedded value (NBEV) - a measure of long-term economic profitability - it achieved S$82.1 million for Q2. This was lower than the same quarter last year, a result of lower sales and margins. In Singapore, a shift in channel mix led to a lower margin, while in Malaysia, a downward adjustment was made to factor in the impact of changes in tax regulations.
The board of directors has declared an interim tax exempt (one-tier) dividend of 10 cents per ordinary share for the financial year ending December 31, 2015, to be paid on September 2, 2015.