UAP Holdings posts Sh1.2bn profit on cost cutting drive
UAP Holdings held off a tough operating environment to record a Sh1.2 billion net profit for the 2017 financial year, a 46.5 percent increase in profit compared to the Sh826 million gains recorded in a similar period in 2016.
The soaring growth is largely accredited to the company’s managerial input that helped bring order into the insurer’s book keeping records.
Some of the measures carried out include the shedding off of loss making accounts and controlled operating expenses that saw the a restructuring exercise completed in March 2017.
Speaking during the release of the 2017 financial year results, UAP Old Mutual Group chief executive officer Peter Mwangi said that the cost saving measures by management have driven the company’s growth.
“We were able to post a profit before tax growth of 64 percent and that reflects the deliberate actions that we as management have been driving with the support of our board to get the balance between writing a lot of business and writing quality business,” Mr Mwangi said.
The reversal of two consecutive bearish years at the Nairobi Securities Exchange (NSE) was also a key factor for UAP Holdings contributing to the positive growth, increasing on the investment income due to the appreciation of the equities portfolio.
Moreover, stable returns from fixed income and an increase in rental income from the property portfolio resulting in a 27.9 percent growth in investment income to Sh3.9 billion for the financial year.
Net earned premiums rose 0.5 percent to Sh15.5 billion while also earning Sh799 million in commissions.
As for the 2018 projection, Mr Mwangi is optimistic of a stable political environment and a good climate supporting agricultural production which will in turn enhance economic growth in the region.
Mr. Mwangi further expects the upcoming merger of all the group business to offer customers with a more enhanced service.
“We are on the journey to create an integrated financial services business by bringing together all of our businesses under one roof to offer our customers, a seamless service,” Mr Mwangi added.
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