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Comments Off on Tune Protect’s 9MFY15 earnings meet expectations

Tune Protect’s 9MFY15 earnings meet expectations

KUCHING: Tune Protect Group Bhd’s (Tune Protect) first nine months of financial year 2015 (9MFY15) earnings has met analysts’ expectations, resulting in unchanged FY15 and FY16 earnings forecasts.

In a press release on Bursa Malaysia, Tune Protect said that over 9M, profit after tax came in at RM47.7 million, an 8.2 per cent decrease over the same period last year – mainly due to higher management expenses which include higher royalty fees related to the use of the Tune trademark and cost of rebranding, as well as the one-time sale of building in 2014.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), after stripping out one-off gain of RM4.3 million from sale of building in 9MFY14, the normalized earnings in 9MFY15 saw a flat on-year growth.

Overall, core cumulative earnings of RM45.5 million came in within MIDF Research’s expectation at 74 per cent of the research arm’s full-year estimate but below street estimate at only 58 per cent.

Premised on above, MIDF Research maintained its FY15 and FY16 earnings forecasts.

Hence, MIDF Research reiterated its ‘buy’ stance with an unchanged target price of RM1.86 per share.

The research arm noted that key catalysts for the earnings growth of 12.9 per cent year on year (y-o-y) next year will be as following rising air travel demand growth which is expected to increase the purchase of travel insurance, regional exposure via partnerships with airlines such as AirAsia, Cebu Pacific and Air Arabia as well as established arrangements with local insurance partners across the region and new investment opportunities though overseas ventures.

Meanwhile, it underlined that the downside risks include further economic slowdown will pose an adverse impact on the group’s travel insurance business as consumers’ spending on air travel is discretionary and strain on capital position in the event of higher insurance claims.

Source: The Borneo Post; 18 November 2015

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Comments Off on Tune Protect’s 3Q profit falls 20%

Tune Protect’s 3Q profit falls 20%

KUALA LUMPUR (Nov 16): Tune Protect Group Bhd, formerly Tune Ins Holdings Bhd, posted a 20.44% year-on-year (y-o-y) drop in its net profit for the third quarter ended Sept 30, 2015 (3QFY15) to RM12.86 million from RM16.17 million, mainly due to higher management expenses and a one-off rebranding spend.

Its revenue for the quarter, on the other hand, rose 10.53% y-o-y to RM121.05 million, Tune’s filing with Bursa Malaysia today showed.

“In light of the softer economic outlook and ongoing geo-political circumstances, the group posted respectable, double-digit growth with strong contribution mainly from our Global Travel business.

“This year, we incurred higher management expenses due to higher royalty fees in the licensing of the Tune trademark, which was partially deferred to this year, and a one-time Tune Protect rebranding spend,” said Tune’s chief executive officer Junior Cho.

Cho added that there was an 11.7% growth in Tune’s Global Travel business for the nine-month period (9MFY15), while its Malaysia’s general insurance business jumped by 38.9% in the same period — after taking out the one-time gain from selling its former headquarters on Jalan Ampang last year.

For 9MFY15, Tune’s net profit came to RM45.49 million or 6.05 sen a share, 8.59% lower than the previous corresponding period’s RM49.76 million or 6.62 sen a share. Revenue, however, climbed by 6.95% to RM347.55 million.

Cho said its Global Travel business’ growth came because of “healthy travel demand, despite recent regional events ranging from Bangkok bombings, Bali volcanic activity, and prolonged haze conditions in Malaysia, Singapore and Indonesia”.

He is banking on Global Travel business’ growth for the remainder of 2015, even when taking 2016’s slower economic growth forecast into the equation.

“We see increased travel demand as we enter the last quarter of 2015 and with our continued education marketing and take-up rate initiatives, we hope to increase awareness in the value of travel insurance and capitalise on the peak travel season,” Cho added.

“In addition, we will continue our rollout into travel agencies until mid-2016 to further extend our product offerings to customers who prefer doing travel bookings through offline channels,” he said.

However, he conceded that the general insurance industry might face slower growth because of the uncertainty in the macroeconomic landscape.

“While Tune Insurance Malaysia Bhd (Tune’s Malaysia general insurance business) will face similar headwinds, it is our expectation that its growth should outpace the industry average for the remainder of the year,” he added.

Tune, part of the AirAsia Group of companies, closed flat today at RM1.47 after hitting a low of RM1.45 earlier, giving it a market capitalisation of RM1.11 billion.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

Source: theedgemarkets.com; 16 November 2015

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Comments Off on Tune Protect Sees Strong Growth In Next 3 Years

Tune Protect Sees Strong Growth In Next 3 Years

Tune Protect Group Berhad is targeting to achieve a high single-digit to low double-digit growth in net profit in the next three years, driven by strong growth in its travel and general insurance segments.

The company, previously known as Tune Ins Holdings Berhad, will continue to focus on enhancing its business to be a global player in travel insurance as well as strengthening its digital-to-consumer business.

“The hope of recent rebranding will certainly deliver promises to customers in making claim processes simple and well balance thus giving greater recognition to drive customer experiences. This will certainly help us in realising our targets (in the next three years),” CEO Junior Cho told The Malaysian Reserve recently.

For the second-quarter ended June 30, 2015, Tune Protect’s net profit increased 12.5% to RM16.1 million compared to RM14.3 million a year earlier while revenue rose to RM115.3 million from RM101.5 million previously.

For the sixth-month period, Tune Protect registered a net profit of RM32.6 million, 2.9% lower compared to RM33.6 million a year ago, on the back of RM226.5 million in revenue.

In 2014, Tune Protect’s gross written premiums grew 9% against 2013 while net earned premium growth increase 11%.

Cho said the growth in the travel insurance segment, which has been growing at a double-digit rate, will be driven by the higher recognition for the needs of travel insurance and healthy regional travel.

Cho said the travel insurance market is still under penetrated and stressed the importance of educating consumers on the need for such insurance.

In Malaysia, the penetration rate for travel insurance is 25% and there is still room for growth.

“We are always open for opportunities. If there is anything viable, then we will look for it. Our aim is to become a global player for travel insurance,” he said, adding that partnership and joint venture are its strategies.

He said the company will be focusing within the Asean region with Indonesia as a good potential market.

He said Tune Protect currently has three airline partners namely AirAsia group (its sister company), Air Arabia and Cebu Pacific Airways.

Asked on the issue of detariffication that is likely to take place in phases starting 2016, Cho sees it as very favourable to consumers and the industry as the premiums are based on the risk profile of the drivers or consumers.

“It is great for the industry and will be kicking off in phases. But, we are still waiting for the full role (as an insurance provider) out of the detariffication,” he said.

“I view it positively as consumers with low risk will certainly benefit.”

Source: The Malaysian Reserve; 11 November 2015

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