Shares of Great Eastern Holdings Ltd (SG:G07) fell 1.7% today after the Singapore-based insurance giant reported plunging profits for the six months ending December 31, 2023. The company explained that the inverted Singapore Dollar yield curve made shorter-term interest-yielding investments more appealing than longer-term single-premium products to some customers.
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Singapore-based Great Eastern provides life insurance, non-life insurance, and investment management services.
The company’s board announced a final one-tier tax-exempt dividend of S$0.40 per share, lower than the S$0.55 offered last year. The final dividend brings the total dividend for Fiscal 2023 to S$0.75 per share, higher than last year’s dividend of S$0.65 per share.
Great Eastern’s H2 FY23 Results
For the second half of Fiscal 2023, Great Eastern’s net profit attributable to shareholders fell 13% year-over-year to S$337.4 million, while for the full year, the metric increased 27% to S$774.6 million.
Further, Great Eastern’s Insurance Service full-year results dropped 29% to S$574.8 million, while Net Investment Income grew 219% to S$5.86 billion, thanks to huge unrealized gains on investments. The company reported unfavourable claims experience during the year, leading to lower insurance service contribution.
Is Great Eastern Stock a Good Buy?
Despite the several challenges impacting the insurance industry, Great Eastern managed to live up to its commitment to shareholders. The company’s board is proposing to pay 15.4% more dividends than Fiscal 2022, showing its resilience in times of trouble. This also implies that Great Eastern is in good shape to turn back its fortunes once the tides change in the industry’s favour. G07 stock has lost 1.8% in the past year.
