Royal Exchange Plc group has announced a gross premium income of N3.3 billion in 2008 financial year.
This represents 22 per cent increase when compared with N2.7 billion gross premium recorded in the previous operating year.
Total expenditure, however, rose sharply by over 100 per cent to N1.492 billion from N740.65 million. The sharp rise was occasioned by a N1.16 billion management expenses which shareholders condemned in totality.
This resulted in a loss before tax of N1.54 billion, compared with the profit-before-tax of N775.41 million for the corresponding full year of 2008, after which taxation of N896.463 million brought loss after tax to N2.44 billion, from a net profit of N647.14 million.
The insurance companyâ€™s loss for the year was also occasioned by exceptional items of N1.4 billion, which comprised expenses on de-merger of N95.95 million, Rights Issue expenses of N24.55 million, re-branding expenses of N16.96 million, provision for doubtful balances (fees it is not sure of collecting) of N995.01 million and â€˜arrears of PAYE (pay as you earn) and withholding taxes which amounted to N242.01 million.
This represented to a loss per share of 66 kobo, from earnings per share of 19 kobo recorded the previous year.
Its shareholdersâ€™ funds also slipped by 49% to N6.084 billion in the year under review, from N11.916 billion achieved in the preceding year. Mr. Kenneth Odogwu, chairman of the company at REANâ€™s 40th annual general meeting held in Lagos recently said that in 2008 the group successfully completed the de-merger of the general insurance and life assurance divisions into separate, wholly owned subsidiaries and we also consolidated the results of the new healthcare and finance house subsidiaries into the group results.
Odogwu said , â€œOverhead expenses in 2008 totalled N1.49 billion, up from N741 million in 2007, due to provision for doubtful asset balances of N99 million and a charge of N86 million for the diminution in the value of our quoted equity portfolio. Management expenses increased to N1.16 billion, a 76 per cent increase over 2007, but in line with the consolidation of the new healthcare and finance subsidiaries for the first time. A loss before tax and exceptional items of N165 million is reported for the group.â€
He explained further that the company undertook a number of strategic initiatives aimed at positioning the company as a broad-based financial services provider. â€œDespite a very difficult and challenging 2008, your board remains extremely confident of the future. The repositioning of the Royal Exchange group will be largely completed in 2009, and thereafter, it is expected that profit performance will become more robust and resilient and in an environment of greater risk diversification.â€