Menora Mivtachim (MMHD) Q1 2022 earnings summary

Executive summary

• Q1 net profit rose 35.8% YoY to NIS 212.5m, while comprehensive income after tax was NIS 91m and comprehensive income attributable to shareholders fell 54.1% to NIS 92m.

• Premiums, contributions and investment-contract receipts increased 11.1% to NIS 6.667bn; gross earned premiums rose 6.6% to NIS 1.841bn.

• Pretax comprehensive income fell to NIS 146m from NIS 301m; weaker general insurance and life/long-term savings results were partly offset by health insurance.

Financial highlights

• Profit before tax increased 40.4% YoY to NIS 325m; net income was NIS 212.5m versus NIS 156.2m.

• Total revenue was NIS 1.533bn versus NIS 3.190bn; net investment and financing income was a NIS 295m loss versus NIS 1.386bn income.

• Gross premiums across insurance lines, including investment-contract receipts, were NIS 2.094bn, up 10.8% YoY.

• Underwriting profit was NIS 119m, calculated using a normative annual real return assumption of 3%.

Outlook and guidance

• ERN IPO was under consideration; the transaction was expected to result in control and a significant capital gain, according to the stated estimate.

• Solvency capital targets rise through 2024 to 115% for the insurance operation and 113% for Shomera; reported solvency ratios were above target.

• IFRS 17 was scheduled for first application in Israel on Jan. 1, 2024, with transition on Jan. 1, 2023; 2023 pro forma disclosures were expected.

• New health-insurance policy rules take effect Dec. 1, 2022, with effects on marketing and new-product coverage dependent on customer and competitor behavior.