QBE Insurance Group Reports Strong Half-Year Financial Results for 2024
QBE (QBE) Share Update August 2024 Thursday 8th
QBE Insurance Group Announces Strong Half-Year Financial Results
QBE Insurance Group Limited (ASX: QBE) has announced its financial results for the half year ended 30 June 2024, showcasing a significant increase in net profit and strong overall performance.
Instant Summary:
- Revenue from ordinary activities increased by 5% to $10,436 million.
- Net profit after tax attributable to equity holders doubled to $802 million.
- Statutory insurance operating result rose to $828 million from $377 million.
- Total net investment income increased to $502 million from $461 million.
- Effective tax rate decreased to 23.3% from 30.8%.
Financial Performance Overview
QBE Insurance Group Limited reported a robust financial performance for the first half of 2024. Revenue from ordinary activities increased by 5% to $10,436 million, up from $9,921 million in the same period last year. The net profit after income tax attributable to equity holders of the company more than doubled to $802 million, compared to $400 million in the prior period.
The statutory insurance operating result also saw a significant increase, reaching $828 million, up from $377 million in the previous year. This improvement was primarily due to lower catastrophe costs and more stable reserve development. Additionally, premium growth continued through rate increases and targeted new business growth, although this was partly offset by lower Crop premium and the impact of portfolio exits in North America and Australia Pacific.
Investment Income and Tax Rate
Total net investment income for the period was $502 million, an increase from $461 million in the prior period. When excluding the impacts of risk-free rates, the investment income was $733 million, supported by strong risk asset performance and favorable interest rates across the core fixed income portfolio.
QBE's effective tax rate for the half year decreased to 23.3%, down from 30.8% in the prior period. This reduction reflects the mix of corporate tax rates in the jurisdictions where QBE operates and the utilization of previously unrecognized tax losses in the North American tax group.
Dividend Declaration
The directors have declared an interim dividend of 24 Australian cents per share for the half year ended 30 June 2024, which is 20% franked. This compares to a 14 Australian cents per share interim dividend in the prior year. The total interim dividend payout amounts to A$360 million, up from A$209 million in the previous period.
The Dividend Reinvestment Plan and Bonus Share Plan will be satisfied by the issue of shares with no discount applicable. The record date for determining shareholder entitlements to the dividend is 19 August 2024, with the interim dividend to be paid on 20 September 2024.
The strong financial performance and significant increase in net profit are likely to positively impact QBE Insurance Group's stock price. The improved investment income and lower effective tax rate further strengthen the company's financial position. However, the impact of lower Crop premiums and portfolio exits should be monitored closely by investors.
Investor Reaction:
Analysts have responded positively to QBE's financial results, noting the substantial increase in net profit and strong investment performance. The declaration of a higher interim dividend has also been well-received, indicating confidence in the company's future prospects.
Conclusion:
Investors should consider QBE Insurance Group's strong half-year performance and the potential for continued growth. The company's strategic initiatives and improved financial metrics suggest a positive outlook. Investors are encouraged to stay informed on QBE's developments and assess the long-term impact on their portfolios.