MNRB Talks About Revenue Growth

Was reading some articles. On Business Times, the following caught my attention.

• MNRB expects 8.5pc revenue growth
  
  By Rupinder Singh Published: 2009/08/29
  
  REINSURANCE group MNRB Holdings Bhd (6459) expects revenue growth this financial year to be lower than last year's, underpinned by the soft reinsurance market and slow economic conditions.
  
  However, it remains confident of posting 8.5 per cent revenue growth although it grew 20 per cent in the year to March 31 2009.
  
  Its chairman Sharkawi Alis said the group will be cautious this year as the global financial crisis has yet to pass.
  
  Its subsidiary, Malaysian Reinsurance Bhd (Malaysia Re), is expected to spearhead MNRB's growth, but will be selective in its overseas ventures due to its limited capital.
  
  After registering 20 per cent growth in gross premium last year, Malaysian Re is expecting growth of between 15 per cent and 20 per cent this year.
  
  "Growth will be there, but it won't be as good as last year's. It will be a controlled growth," Malaysian Re chief executive officer Hashim Harun said.
  
  The unit is expecting overseas business to constitute 25 per cent of its total gross premium this year as compared to about 23 per cent last year.
  
  Meanwhile, Islamic insurer Takaful Ikhlas Sdn Bhd is said to be in a consolidation phase this year. However, it still expects to grow its gross contributions to RM600 million for 2010.
  
  MNRB Retakaful Bhd is hoping to grow its overseas business by 30 per cent. It aims to strengthen its share of existing markets and expand into new ones such as Saudi Arabia, Syria and other emerging markets.

I was bemused and lost by the first two sentences.

• REINSURANCE group MNRB Holdings Bhd (6459) expects revenue growth this financial year to be lower than last year's, underpinned by the soft reinsurance market and slow economic conditions.
  
  However, it remains confident of posting 8.5 per cent revenue growth although it grew 20 per cent in the year to March 31 2009.

???

Is that a typo? I do not know.

Anyway, when a company speaks only about revenue growth, I always tend to be suspicious.

And true enough when I was not impressed at all when I saw MNRB financial earnings snapshot posted on Friday

So next time, when you hear a company talking about revenue growth, do get your supply of salt ready!

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Edit: 31st Aug 2009.

The following posted on Star Business.

• Monday August 31, 2009
  
  MNRB sees modest growth on selective underwriting
  
  KUALA LUMPUR: MNRB Holdings Bhd sees a modest growth of 8.5% in revenue in its fiscal year ending March 31, 2010 (FY10) due to selective underwriting, overseas expansion and a higher claims ratio.
  
  The reinsurance company posted a 20% growth in revenue to RM1.2bil but net profit plunged 86.7% to RM22.7mil in FY09 against FY08.
  
  Chairman Sharkawi Alis said profitability in the industry might not be in tandem with the revenue achieved.
  
  “We may do well in increasing the premiums growth but higher claims could pull down profit likewise in FY09. The large difference in net profit in FY09 was also contributed by the RM75mil proceeds from MNRB’s disposal of a 3.24% direct equity interest in Malaysian Oxygen Bhd in FY08,” Sharkawi said after the company’s AGM on Friday last week.
  
  He added that under the current economic climate and what the company had experienced last year, nobody could conclude that the worst was over, hence the modest projection. Sharkawi said Malaysian Reinsurance (MNRB’s wholly-owned subsidiary) would be selective in the industry that it underwrites and not just underwrite for the sake of premiums growth.
  
  “Overseas market expansion, which had been rapid for the past couple of years, will be done cautiously this year to make sure we will invest only in profitable business. Our takaful operation under Takaful Ikhlas, which had enjoyed growth 30% to 40% over the last couple of years, will also consolidate this year. We only target gross contribution income of RM600mil compared with RM580.5mil last year,” he said.