Qatar General Insurance & Reinsurance Company Q.P.S.C. (QGRI) Earnings Call Transcript & Summary

Good day, and welcome to the Qatar General Insurance & Reinsurance Quarter 2 2022 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Ahmad Almasry. Please go ahead. Thank you.

Hello, ladies and gentlemen. I would like to welcome all of you to the earnings conference call of Qatar General Insurance & Reinsurance Company for the 6-month period ended at the 13th (sic) [ 30th ] of June 2022. My name is Ahmad Almasry, Assistant Investment Portfolio Manager and the Investor Relations Officer. I will start with a disclaimer. Thereafter, we will provide you all with a summary of our operational and the financial results. I will now read our disclaimer to this conference call. This call may contain, constitute or imply information or forward-looking statements regarding the operational or financial performance and the future of Qatar General Insurance & Reinsurance or any of its subsidiaries. Such statements are based on the current expectations and assumptions of the QGIR Co.'s management to their best knowledge and diligent assessment as of today. As such, QGIR Co., its directors and officers shall not be liable in any way for any costs, losses resulting from the use of any forward-looking statements throughout the duration of this call. I'm delighted to give the floor to our Financial Reporting Manager, Mr. Omar Alsabbah, who will start with a general update on QGIR Co.'s first 6 months of 2022 results.

Thank you, Ahmad. As a result of the continuously applying prudent approach while performing our investment and insurance activities during the first half of year 2022, which resulted in a net profit of QAR 42.2 million, showing a drop of QAR 26.4 million over the same period last year. The proactive measures and prudent approach in the insurance business are expected to show a positive result in the coming years. We have succeeded to limit the effects of the COVID-19 pandemic on our business operations and kept the company in the right direction. As for the investment operations, our prudent policy succeeded to keep us away from the market volatility, resulted from regional and international political unrest, and maintain the cash flow streams from our investment assets. Our insurance and investment policies will have a positive impact on our profitability in full year 2022 and is expected to continue to benefit QGIRCO in the future. Qatar General Insurance & Reinsurance remains in good financial condition as our total assets is about QAR 9 billion, and our total shareholders' equity exceeds QAR 5 billion. Now allow me to discuss with you the financial results in more detail before handing over to our colleague, Mr. Ahmad Almasry, to take you through the outlook. To start off, I'll provide you with the high-level results before we get into the details. Qatar General Insurance & Reinsurance first half 2022, total insurance revenue stands at QAR 394 million with gross written premiums representing 71.4% and contribution from General Takaful representing 29.6%. During the period, the management has taken proactive measures to enhance QGIRCO insurance profitability by undertaking client portfolio review, applying a prudent approach in relation to claims management. This led to a strong underwriting results in the first half 2022, showing QAR 82.4 million comparing with QAR 68.6 million for the same period last year. Furthermore, the management succeeded to reduce finance costs by 12% over the same period of last year. Despite the coronavirus pandemic effects on all sectors, we succeeded to keep our investment portfolio performance as per our expectations. The investment income for the first half 2022 reached QAR 56.5 million comparing with QAR 75.6 million for the same period last year. The above resulted in the shareholders' net profit of QAR 43.1 million in the first half 2022 and earnings per share of QAR 0.049. Now I will hand over to Mr. Ahmad.

Thank you, Omar. Well, we're still witnessing the positive outcomes of post-COVID-19 recovery and the growth. Qatar's economy is doing well quite well. And this is backed by the strong hydrocarbon prices that's helping and boosting the overall liquidity into the system, which has affected positively the local market, especially the local stock market. However, the global economic environment is still challenging to capture, and this is making us on alert to any changes that could affect both our insurance and investment income lines. We would like to highlight that our insurance business line is getting stronger, aided by the recovery in the economic activity, tourist arrivals before and during the 2022 FIFA World Cup and the rollout of the new health insurance plan for [ expatriates ] and their families and visitors as well. For the investment and real estate business line, we expect to record less investment income this year compared to 2021 due to the following: number one, replacing major tenant of one of our main commercial real estate; number two, adopting a new investment strategy and asset allocation; and thirdly, we have achieved a remarkable updates on our internal policies and the procedures, IT infrastructure and marketing strategies. We believe that these recent updates will start paying off in 2023. And we believe that under the guidance of the top executive management, we are certain of achieving success in implementing our strategy. I'm done with presenting our outlook, and I would like to note that this call and the investor presentation and the fact sheet will be available on our IR section on our website, www.qgirco.com, by the end of tomorrow. And you can reach us anytime throughout our contacts on the IR section. Ladies and gentlemen, on behalf of the whole QGIR Co. team, thank you very much, and we wish you a great day and a productive week ahead. If you have any questions now, please go ahead.

[Operator Instructions] We will take the first question from the line [ Mohammed Alsaid ].

Hello, everyone. I have a quick question. So given you're trading 1/3 of your book value, can you just tell us when would you be able to catch up to reach your book value?

Sorry, you asked about our -- market value of our share? Hello?

The book value of the share, right.

Okay. The differential between the market value and book value?

Yes.

Can you repeat the question, please?

So my question is, if you can tell us a little bit more why you are trading 1/3 of the book value?

It's market demand and supply.

Yes. So I guess, my question is, is there anything fundamental reflecting this low valuation?

No. Not that I have [ noted ]. Nothing to our...

So can you just elaborate more and throw some color on why you are trading 1/3?

Trading has nothing to do with that. Okay. So one factor is the book value. But there are the many factors, the [ core one ], our shareholders don't want to sell or this one and the demand -- supply and demand. It's not just the book value that would affect our market value for our shares. It's part of it, but this is that. You can see that there is our [ free float ]. My friend, you can see our trading, it's minimal for our company. It's not [ liquid ] that much.

So essentially, this is because of the low liquidity of the share. Is that right?

Yes. I think yes. I think somebody willing to sell their shares, I assume.

And do you see any -- right. And do you see any improvement in your return on equity?

For sure. For sure. Because now we are now rebuilding our investment strategy and our underwriting strategy. And we're just looking forward for the coming year, inshallah, shall next year to just get everything as usual. We have a good return on equity. Okay. We have just -- we have a huge equity. You know that shareholders' equity. And hopefully, by next year, inshallah, will be achieved more and more.

There's no further questions [Technical Difficulty] We do not have any questions.

Okay. We can wrap the call up, if there are no more questions.

Thank you. [Technical Difficulty]

Thank you, guys, very much. See you next quarter.