The Board of Directors of Takaful International Company B.S.C. (Trading Code: TAKAFUL) approved the financial results for the period ended 30 June 2023, which were presented in accordance with the new Financial Accounting Standards (FAS) 42 & 43 and 30, issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) which are equivalent to the International Financial Reporting Standards IFRS 17 and IFRS 9.

 

The financial results for the three months ended 30 June 2023

 

The net profit attributable to the shareholders was BD 43K for the three months ending on 30 June 2023, a 34% decrease from the net profit of BD 65K for the same period in the previous year. Comparatively, earnings per share decreased to 0.5 Fils from 0.76 Fils for the same period in the previous year. Total comprehensive loss for the three months ended 30 June 2023 stood at BD 78K compared to a total comprehensive loss of BD 205K for the same period last year.

 

The Company reported a total net profit of BD 168K during the second quarter of the year 2023 compared to BD 227K for the same period in the previous year, with a decrease of 26%. The General and Family Takaful Funds achieved a surplus of BD 125k during the second quarter of 2023, compared to a surplus of BD 162k for the same period of the previous year, which decreased by 23%. This decline in the performance of the two Takaful funds is due to the application of the new accounting standards, which are subject to the estimates of the actuary, as it affected the technical reserves and other reserves. The shareholders’ fund achieved a profit of BD 43K during the second quarter of the year 2023, compared to a profit of BD 65K for the same period of the previous year, a decrease of 34%.

 

Recognized takaful contributions was BD 5.848 million for the period ending on 30 June 2023, compared to BD 5.987 million for the same period of the previous year a decrease of 2%. Recognized Takaful Costs were BD 4.416 million during the period ending on 30 June 2023 compared to BD 4.882 million in the same period of the previous year, with a decrease of 10%.

 

The financial results for the six months ended 30 June 2023

 

The shareholders’ net profit was BD 428K for the six months ending on 30 June 2023, an increase of 32% from the net profit of BD 325K for the same period in the previous year. Comparatively, earnings per share increased to 5.04 Fils from 3.82 Fils for the same period in the previous year. The comprehensive income for the six-month period ending on 30 June 2023, was BD 303K, compared to a profit of BD 23K for the same period of the previous year.

 

The Company reported a total net profit of BD 651K during the second quarter of the year 2023 compared to BD 898K for the same period last year with a decrease of 27%. The General and Family Takaful Funds achieved a surplus of BD 223k during the second quarter of 2023, compared to a surplus of BD 573k for the same period of the previous year, which decreased by 61%. This decline in the performance of the two Takaful funds is due to the application of the new accounting standards, which are subject to the estimates of the actuary, as it affected the technical reserves and other reserves. The shareholders’ fund achieved a profit of BD 428K during the second quarter of the year 2023, compared to a profit of BD 325K for the same period of the previous year, an increase of 32%.

 

Recognized Takaful contribution was BD 12.282 million for the six months ending on 30 June 2023, compared to BD 12.195 million for the same period of the previous year, an increase of 1%. Recognized Takaful Costs were to BD 9.740 million during the period ending on 30 June 2023, compared to BD 9.011 million in the same period of the previous year, with an increase of 8%.

 

The company’s shareholders equity amounted to BD 11.426 million as of 30 June 2023, compared to BD 11.547 million as of 31 December 2022, a decrease of 1%.

 

The company's total assets increased by 11% from BD 42.757 million as of 30 June 2023, to BD 38.503 million as of 31 December 2022.

 

Board of Directors’ Comments

 

Commenting on the financial results, Mr. Ebrahim Al-Rayes, Chairman of the Board of Directors, stated that the company was able to achieve good results despite the general high loss ratios in the insurance market and the impact of the new accounting standards on the company’s provisions and technical reserves, which the company recently implemented in accordance with the new accounting standards that were issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOFI) for insurance companies equivalent to the International Financial Reporting Standards (IFRS 17&9). Adding, we are proud to announce that we are the first shareholding company implementing the new accounting standards FAS 43 issued by the Islamic Accounting and Auditing Organization. that the Board of Directors approved the financial statements, which were in line with the strategic plans approved by the Board at the end of the year 2022.

 

Chief Executive Officer’s Comments

 

Mr. Essam Al-Ansari, CEO of the company, said that the company launched the second phase of the new automated system project for family takaful operations in the second quarter, after successfully launching the first phase for general and motor takaful operations. This comes while maintaining control over administrative expenses, which was 15.3 % of net written contributions compared to 18.1% for the same period of the previous year.