not vested
Great Eastern’s ($24.16, down 4 cents) operating profit from its insurance business for 4Q’14 and FY’14 was S$156mln and S$591mln respectively, 15% and 6% higher yoy, underpinned by a growing in-force business, particularly from the investment-linked fund in Malaysia.
In Singapore, the agency channel continued to deliver stable performance in 4Q’14.
The bancassurance channel saw a recovery in sales from earlier quarters, though overall sales for 4Q’14 was still lower yoy.
For 4Q’14, the group recorded nonoperating profit growth of 73% to S$25.5mln reflecting higher unrealised mark-to-market gains.
For FY’14, non-operating profit was S$145.2 million, reversing from last year’s loss of $10mln.
Net profit for 4Q’14 and FY’14 rose 25% and 30% yoy to S$208mln and S$879mln respectively, reflecting higher unrealised mark-to- market gains from favourable financial market conditions and growth in operating profit from the insurance business.
The capital adequacy ratios of the group’s insurance subsidiaries in both Singapore and Malaysia remained well above the minimum regulatory ratios of
120% and 130% respectively, reflecting the strong capital position of the Group.
The Group’s Embedded Value, an estimate of the long-term economic value of a life insurance company for the existing blocks of business, rose significantly by 13% to S$10.4 bln in FY’14, driven by an increase in the value of adjusted shareholders’ fund from strong investment performance as well as growth in the value of the in-force business.
Final dividend was raised from 27 cents last year to 40 cents this year but last year’s special dividend of 27 cents was reduced to 5 cents this year.
Including the interim dividend of 10 cents, full year payout of 55 cents (down from 64 cents last year) translates to a dividend yield of 2.28% (at $24.16).
The dividend yield is probably decent enough for shareholders to HOLD on for another privatization attempt by OCBC (owns 87.17% of the company), given their failed attempt (2x) in the past 10 years. (Trailing PE is 13x while price to book is 2x).
Source: Lim & Tan