Harel Insurance Investments & Financial Services (HARL) Q1 2024 earnings summary

Executive summary

• Q1 comprehensive income attributable to shareholders was NIS 233M after tax, versus NIS 33M in Q1 2023; total comprehensive income was NIS 236M, versus NIS 36M.

• Adjusted pretax profit rose to NIS 388M from NIS 228M, including NIS 178M of insurance underwriting improvement; stronger investment returns also supported results.

• The War reduced Q1 results by NIS 34M before tax; AUM was NIS 452.9B at March 31, 2024, and a NIS 350M dividend was approved.

Financial highlights

• Premiums and deposits reached NIS 9.9B, versus NIS 9.2B in Q1 2023; AUM of NIS 452.9B was up 6% from year-end 2023.

• Total income was NIS 7,679M versus NIS 5,646M; net investment and financing income rose to NIS 3,784M from NIS 1,529M.

• Gross premiums earned were NIS 3,883M versus NIS 4,217M; retained premiums were NIS 3,334M versus NIS 3,608M.

• Profit before tax was NIS 336M versus a NIS 68M loss; owners’ net profit was NIS 211M versus a NIS 48M loss, and EPS was NIS 1.02 versus a NIS 0.52 loss.

• Shareholders’ equity was NIS 8.7B versus NIS 8.4B a year earlier; operating cash flow used NIS 1,661M, and cash and equivalents ended at NIS 10,611M.

Outlook and guidance

• 2026 targets include NIS 1.5B comprehensive income, 13.5% ROE, NIS 520B AUM, NIS 43.8B premiums and deposits, and NIS 1.91B fee income.

• Forecast assumptions include 3.0% real nostro return and 3.0% CPI change, maintained market share, and execution of profitability and revenue-diversification plans; actual results may vary with markets, macro conditions and regulation.

• 2030 strategic priorities include stronger core-segment execution, customer relationships and distribution, and diversified income; adjusted-profit measures exclude special effects and assume a 3% real nostro yield.

• IFRS 17 and IFRS 9 are scheduled to apply to Israeli insurance companies from January 1, 2025; preparation includes system testing and transition disclosures during 2024.