Harel Insurance Investments & Financial Services (HARL) Q2 2024 earnings summary

Executive summary

• H1 net profit was NIS 357M, versus a NIS 91M loss a year earlier; Q2 net profit was NIS 143M, versus a NIS 46M loss.

• H1 adjusted profit rose NIS 185M YoY to NIS 829M; insurance underwriting profit increased to NIS 606M from NIS 410M.

• H1 reported comprehensive income was NIS 132M, unchanged YoY; the separate after-tax figure was NIS 125M. Q2 reported comprehensive loss was NIS 104M, while the after-tax figure was NIS 108M.

• Results reflected weaker investment yields, insurance-liability remeasurement and mixed underwriting; health and non-life improved while life and long-term savings remained pressured.

Financial highlights

• H1 premiums and deposits were NIS 20.5B, up 8.2% from NIS 19.0B; gross premiums earned were NIS 8,022M versus NIS 8,896M.

• H1 total income was NIS 12,956M versus NIS 13,516M; profit before tax was NIS 511M versus a NIS 157M loss, and EPS was NIS 1.69 versus negative NIS 0.46.

• H1 adjusted profit was NIS 829M versus NIS 644M; underwriting profit was NIS 606M versus NIS 410M.

• H1 investment and financing income was NIS 4,879M versus NIS 4,783M; management-fee income was NIS 848M versus NIS 739M.

• Total assets were NIS 147.0B and total equity NIS 8.7B at June 30, 2024; AUM was NIS 462.6B.

Outlook and guidance

• 2026 targets: AUM of NIS 520B, premiums and deposits of NIS 43.8B, and fee income of NIS 1.91B.

• Forecast assumptions include a 3% real Nostro return, 3% CPI change, strategic execution and premium growth in line with the industry, assuming maintained market share; actual results may vary with markets, macro conditions and regulation.

• Adjusted performance assumes a 3% real Nostro yield and excludes special effects; IFRS 17 and IFRS 9 adoption for Israeli insurers is scheduled for periods starting Jan. 1, 2025, with a Jan. 1, 2024 transition date.