Gulf Union Announces the Interim Financial Results for 3 Months Period

21/04/2013 07:54 AST

GULF UNION COOPERATIVE INSURANCE COMPANY (GULF UNION) ANNOUNCES THE INTERIM FINANCIAL RESULTS FOR THREE MONTHS ENDED MARCH 31, 2013.

1.Net loss before zakat for the first quarter ended March 31, 2013 is 11,855 thousand riyals, compared to net loss of 4,577 thousand riyals for the same quarter of previous year, an increase of 159%, and compared to net income of 10,057 thousand riyals for the last quarter.

2.Deficit of insurance operations, net of policyholders return on investments (the results of operations) for the first quarter ended March 31, 2013 is 13,263 thousand riyals, compared to deficit of 4,058 thousand riyals for the same quarter of previous year, an increase of 227%.

3.Gross written premiums (GWP) for the first quarter ended March 31, 2013, is 138,734 thousand riyals, compared to 148,455 thousand riyals for the same quarter of previous year, a decrease of 7%. And net written premiums (NWP) during the first quarter ended March 31, 2013, is 80,073 thousand riyals, compared to 84,039 thousand riyals for the same quarter of previous year, a decrease of 5%.

4.Net claims incurred for the first quarter ended March 31, 2013, is 44,778 thousand riyals, compared to 37,188 thousand riyals for the same quarter of previous year, an increase of 20%.

5.The net income on investment of policyholders during the first quarter ended March 31, 2013 is 119 thousand riyals, compared to 67 thousand riyals for the same quarter of previous year, an increase of 78%. Net return on shareholders funds for the first quarter ended March 31, 2013 is 1,829 thousand riyals, compared to net income of 73 thousand riyals for the same quarter of previous year, an increase of 2,405%.

6.Loss per share for the three months ended March 31, 2013 is 0.54 riyals compared to loss per share of 0.21 riyals for the same period of last year.

7.The reason for increase in net loss for the first quarter 2013 compared to the same quarter of last year is increase in net claims incurred by 7,590 thousand riyals and increase in general and administrative expenses by 987 thousand riyals, and decrease in reinsurance commission by 1,409 thousand riyals.

8.The reason of the loss for the first quarter 2013 compared to the last quarter is the decrease in the net premium earned by 18,415 thousand riyals, increase in net claims incurred by 1,066 thousand riyals, and decrease in reinsurance commission by 4,470 thousand riyals.

9.External Auditors in their limited review report made qualification by drawing attention to note 7(b) to the interim condensed financial statements which states that the net balances receivable from a related party amounting to Saudi Riyals 22.25 million are under a dispute. Both the Company and its related party have appointed a third party to assist the Company and the related party in reconciling the account balances. Until the date of limited review report, the third party report is not finalized. The ultimate outcome of the account reconciliation process by the third party may result in material differences to the interim condensed financial statements.

Contained in the limited review report of External Auditors that the condensed interim financial statements are prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (IAS 34) and not in accordance with the Standard on Interim Financial Reporting issued by SOCPA, the Company believes that there is no significant differences or financial impact on these condensed interim financial statements as a result of their presentation in accordance with International Financial Reporting Standards instead of Financial Reporting Standards in Saudi Arabia.

10.Certain comparative figures have been reclassified to conform to the presentation of current period.

Tadawul