Ghanaquotes SIC mulls rights issue, income jumps
Ghana - Corporate - 07-29-2010

Ghanaquotes biggest insurance company, SIC, is considering a GHC 25m (USD 17m) rights issue as it seeks to expand in West Africa, a senior company official said on 28 July 2010. The insurerquotes income from premiums during H1 10 rose 25% from a year ago, while after tax profits gained at least 20%, Franklin Asafo Adjei, SICquotes deputy managing director, said. Premium income for H1 09 was GHC 28.6m while net profit was GHC 3.5m. Asafo Adjei added that SIC wanted to acquire a re-insurance company and failing that planned to set up one itself.

The company has targeted growth in Sierra Leone and Liberia and also wants to expand its business in the downstream energy sector, seen as a big growth area once Ghana becomes an oil producer towards the end of 2010. quoteThere is a requirement for us to shore up our capital base. First we must go to the shareholders for preemptive rights for a rights issue,quote he said. quoteThe board has mentioned it but it has not been firmed up,quote he said, adding that he was confident it would go ahead. SICquotes market capitalisation stood at GHC 82m on 27 July 2010. Its shares are up more than 50% in the year to date compared to more than 14% for the All-Share Index and a fall of more than 40% at listed rival Enterprise Insurance.

Asafo Adjei said SICquotes premium income grew in H1 of the year compared to 2009 because of a decline in government contracts in 2009 which had led to a drop off in construction key for its business. quoteIf that premium can grow evenly then we can expect premium income will grow 25% in 2010, but Q4 has always been a strong period so it could go beyond 25% growth,quote he said. But while underwriting profit increased by more than 30%, investment income had fallen because of a drop in interest rates. He said SIC planned to rebalance its equity investments to provide a better long term income.



Source: Reuters