Monday, November 28, 2022

BIHL weathers storm as full year results defies tough trading environment

Botswana Insurance Holdings Limited (BIHL), the country’s leading asset manager and insurer, said it expected the year ahead to be challenging as the global economic recovery is faltering from earlier gains.

However, the BSE-listed outfit weathered the storm as its full year results for the year ended 31 December 2011 showed its profit after tax grew by 42 percent from P332 million in the prior year to P471 million.

The company, which is the parent company to Botswana Life and Bifm, saw its net premium income increasing by 9 percent from P1.62 billion to P 1.8 billion while dividend payouts during the year went down to P 185.5 million from P 216.4million in 2010.

Final normal dividend proposed of 41 thebe per share (gross of tax).
BIHL said both life and asset management divisions were affected by the faltering economy although new products to be launched in the market will revive fortunes.
“We expect 2012 to be yet another challenging but exciting year as we look to consolidate the 2011 initiatives, launch new products and improve service delivery to our customers,” said a statement accompanying the results.

The company said 2011 was a challenging year for Botswana Life because of the effects of tight economic conditions and declining household incomes.

It said the profitability of group schemes has been reduced due to aggressive competitor pricing. However, it is worth noting that all lines returned a healthy profit.

However, the year saw very strong in-flows of annuity sales as a result of government employees taking advantage of the minimum retirement age of 45 years. BIHL is also bullish that new products in the market will cement Botswana Life as a market leader.

The life division implemented the new IT system, Thito, which in the long run is expected to improve the way they “service our clients and add value to the new services provided through our contact centre”.

Botswana Life also launched a new and exciting three year business strategy, Sekgantshwane 2014. Under this strategy, clients can expect to see the launch of new investment and protection policies as well as a much more customer orientated response culture.

The group was hard hit by investments in Zambia as reduction in shareholding saw fee income falling by 19 percent from P137.3 million to P111 million.
BIHL concluded the reduction of shareholding in African Life Financial Service from 70 percent to 49 percent in March 2011 to meet the regulatory requirements in Lusaka.

The move followed a tough stance by the Zambian authorities barring foreign owned fund management companies to own more than 49 percent in local companies.

However, despite the volatile financial markets, assets under management grew modestly by 1 percent to close the year at P17.8 billion.

BIHL through Bifm has invested in new projects, including the Rail Park Mall at the busy bus rank in Gaborone and new mall in Sebele. Bifm has a 14 percent investment in Rail Park, which targets commuters from the surrounding areas of the greater Gaborone.

Airport Junction Life Style Mall is on schedule and it is anticipated that it will open by June 2012.

“These investments are expected to contribute positively to our earnings and will consolidate our premier position in the property development space,” BIHL said.

BIHL shares were trading at 1,000 thebe per share on Monday after it gained 1.9 percent from 981 thebe on Friday following the release of the results last week.


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