Watania Reports Resilient Profits Amid Challenges
Watania International Holding PJSC showcases resilience with a net profit despite challenges, marking a promising future for the company.
Summary
Watania International Holding PJSC achieved a net profit of AED 9.7 million for the nine-month period ending September 2024, despite significant challenges.
Watania International Holding PJSC (DFM: WATANIA), a leading name in the UAE's Takaful sector, has reported a remarkable turnaround with a net profit of AED 9.7 million before tax for the nine-month period ending September 2024. This marks a significant improvement from the previous year's loss of AED 6.6 million, showcasing the company's resilience and strategic acumen.
The company's financial performance is particularly commendable given the backdrop of regional geopolitical tensions and the unprecedented April rains in the UAE, which led to substantial claims in the Property and Motor business lines. Despite these challenges, Watania's sustained profitability for the fourth consecutive quarter underscores its robust operational strategies and commitment to shareholder value.
A closer look at Watania's financial metrics reveals a 9% decline in Takaful revenue compared to the same period in 2023. This was primarily due to pricing pressures in the Motor Portfolio and challenges in the Property line. However, the steady performance of the Family (life insurance) segment and the positive trend in the technical portfolio provided some counterbalance. Additionally, Takaful expenses fell by 12% year-on-year, reflecting the company's successful operational streamlining and efficiency improvements.
One of the standout achievements for Watania is the improvement in its Combined Operating Ratio (COR), which, after adjusting for one-off heavy rain claims, improved significantly to 97% from 107% in the previous year. This improvement highlights the company's effective underwriting strategies and cost management.
Dr. Ali Saeed Bin Harmal Aldhaheri, Chairman of Watania, emphasized the company's strategic focus on technology and customer service as key drivers of its improved performance. The merger completed in 2022 has also played a crucial role in enhancing operational capabilities, enabling better pricing structures and tailored services.
Looking ahead, Watania's strategic initiatives and focus on shariah-compliant investments position it well for future growth. The company's commitment to supporting its members during challenging times, as demonstrated by its handling of the April rains claims, further strengthens its reputation in the Takaful sector.
For investors, Watania's consistent profitability and strategic initiatives suggest a promising outlook. Given the company's resilient performance and strategic focus, the recommendation would be to hold the instrument as it continues to navigate challenges and capitalize on growth opportunities.
Source
Summary
Watania International Holding reported a net profit before tax of AED 9.7 million for the first nine months of 2024, marking its fourth consecutive quarter of profitability despite significant one-time claims from the UAE's April rains. The company's improved financial performance was driven by better results in its Medical portfolio, though overall Takaful revenue declined by 9% due to challenges in the Motor and Property lines. Operating expenses decreased by 12% due to operational efficiencies, and the combined operating ratio improved to just above 100%, or 97% when adjusted for the rain-related claims. The company highlighted its strategic focus on long-term shareholder value, technological advancements, customer service, and operational improvements across its Takaful subsidiaries.
