Royal Exchange Forecasts N500.83m PAT In Q1 2021

Royal Exchange Plc has projected a rise in its Profit after Tax (PAT) to N500.83 million for the first quarter of 2021 (Q1, 2021), indicating a 244 per cent increase from the figures recorded in  third quarter 2020.

This disclosure was made in the latest earnings forecast signed by the Chief Financial Officer of the firm, Olalekan Jayeola, and sent to the Nigerian Stock Exchange Exchange.

The firm said in preparingthe budget the inflation rate was projected at 14 per cent as the worst case scenario.

The exchange rate of N385 to a dollar was assumed.

Key highlights of the earnings forecast of Q1 2021include: Projecting pre-taxprofit  at N736.5million, +244 per cent + Q-o-Q.

Gross Written Premium is expected to hit N4.75 billion, +95 per cent Q-o-Q.

Net premium is projected to decline to N1.7 billion, -19.1 per cent Q-o-Q.

Fees and commission income is projected to decline to N141.2 million, -25 per cent Q-o-Q.

Investment income is projected to increase to N475.51 million, +3.3 per cent Q-o-Q.

Total underwriting expenses is projected to decline to N1.3 billion, -40.5 per cent Q-o-Q.

Total underwriting profit is projected to increase to N567.4 million, +299.4 per cent Q-o-Q.

Total operating expenses is projected to decline to N494.1 million, -5.7 per cent Q-o-Q.

The firm also said the premium income budget for the year is zero based.

Reinsurance is projected at 27 per cent of Gross Written Premium.

Fees and Commission income was forecasted at 11 per cent of reinsurance expense.

Claims expense of N514Million is estimated not to exceed 30 per cent of Net Premium Income.

Underwriting expenses of N685Million is forecasted not to exceed 40 per cent of Net Premium Income.

Management expenses of N479million are estimated not to exceed 30 per cent of Net Premium Income.