Great Eastern's Q2 profit falls 29% on non-operating losses

Great Eastern Holdings' second-quarter net profit dipped on the back of non-operating losses.

Earnings fell 29 per cent to $169 million for the three months to June 30.

The non-operating loss of $26 million compared with a non-operating profit of $15.3 million for the second quarter of last year.

Great Eastern attributed the loss to "higher valuation of long-term insurance contract liabilities", due to "a decline in the discount rate used to value these liabilities".

This offset better investment performance and an operating profit of $161.7 million, up 3 per cent from $156.7 million last year. Earnings per share was 36 cents, compared with 51 cents last year.

GE, which is part of the OCBC Group, will pay a dividend of 10 cents a share on Aug 30 for the 2019 financial year ending Dec 31, the same as the preceding year.

Total weighted new sales fell 9 per cent to $299.9 million from $330.6 million a year ago.

Net profit for the first half rose 31 per cent to $511.7 million. Operating profit fell 2 per cent, while non-operating profit jumped more than seven-fold to $48.6 million from $6.6 million.

Group chief executive Khor Hock Seng said investment performance was strong for the second quarter, in line with favourable market conditions.

"These gains were largely reflected in the group's total comprehensive income instead of the group's profit attributable to shareholders," he added.

Great Eastern shares closed down 0.5 per cent at $25.30 yesterday.

A version of this article appeared in the print edition of The Straits Times on August 02, 2019, with the headline 'Great Eastern's Q2 profit falls 29% on non-operating losses'. Print Edition | Subscribe