Menora Mivtachim (MMHD) Q3 2022 earnings summary

Executive summary

• 9M 2022 net income was ₪694.5m, up from ₪448.7m; Q3 net income fell to ₪108.3m from ₪224.8m amid market volatility.

• Premiums, contributions and investment-contract receipts totaled ₪20.5bn in 9M, up 9.7% YoY; gross earned premiums rose 8.4% to ₪6.44bn.

• Underwriting profit was ₪529m for 9M and ₪204m for Q3, calculated using a 3% real annual normative return.

• Managed assets were ₪274.5bn and shareholders’ equity was ₪5.73bn at September 30, 2022.

Financial highlights

• 9M total revenue was ₪12.99bn versus ₪9.37bn YoY; Q3 revenue was ₪2.56bn versus ₪1.48bn.

• 9M net income attributable to shareholders was ₪685.3m; diluted EPS was ₪10.83 versus ₪6.98 YoY.

• 9M net investment income and financing was ₪5.51bn versus ₪3.82bn; Q3 recorded a ₪615.8m net investment loss versus ₪739.8m income.

• Total comprehensive income was ₪988.8m for 9M, compared with ₪157.7m in the prior-year period.

• Special items included a ₪108m gain from ERN and Click transactions, a ₪25m gain from an actuarial model improvement, and charges of ₪137m for life mortality tables and ₪28m for health assumptions.

Outlook and guidance

• Solvency capital targets rise gradually through 2024 to 115% for the insurer and 113% for Shomera; both ratios were stated to be significantly above target.

• The 2023–2026 strategic plan targets profitable growth, adjacent growth engines, personalized pricing, stronger distribution, product expansion, innovation, customer experience and operating efficiency.

• IFRS 17 and IFRS 9 adoption in Israel is scheduled for 1 Jan 2024, with transition on 1 Jan 2023 and pro forma disclosures planned during 2023.

• The Bank of Israel projected 2023 GDP growth of 3%, versus an estimated 6% in 2022, amid inflation and tighter monetary policy.