Menora Mivtachim (MMHD) Q3 2023 earnings summary

Executive summary

• 1-9 2023 premiums and contributions reached NIS 22.5b; AUM was NIS 304.8b at 30 Sep, up 10% from Dec 2022.

• 1-9 pre-tax profit rose to NIS 814m from NIS 263m; underwriting profit was NIS 688m.

• 9M net profit was NIS 376m, down 15.8% YoY; comprehensive income was NIS 551m versus NIS 225m, including NIS 534m attributable to shareholders.

Financial highlights

• Q3 pre-tax profit was NIS 419m versus NIS 223m; comprehensive income attributable to shareholders was NIS 270m.

• Total income was NIS 9.185bn versus NIS 2.990bn; net investment and finance income was NIS 2.923bn versus a NIS 2.790bn loss.

• Net profit attributable to shareholders was NIS 360m versus NIS 441m; Q3 was NIS 266m, up 6.9% YoY.

• Gross premiums earned rose 10.7% to NIS 6.375bn in 9M; Q3 rose 10.5% to NIS 2.255bn, while management-fee income rose 9.1% to NIS 282m.

• Shareholders’ equity was NIS 6.262bn, up from NIS 5.897bn at year-end 2022; annualized ROE was 12.1% versus 5.3%.

Outlook and guidance

• The Iron Swords war was not expected to have a significant impact on results or the solvency ratio.

• Near publication, retained life, permanent health and disability exposure from the war was estimated at NIS 30–40m pre-tax; higher unemployment could reduce pension contributions and increase withdrawals.

• IFRS 17 and IFRS 9 implementation in Israel was postponed to 1 Jan 2025, with a 1 Jan 2024 transition date; preparations include systems, accounting policies and controls.

• From end-2024, the insurance solvency capital target is planned to rise from 115% to 130% by 2032; achievement at every point is not assured.

• Dividend policy targets distributions of at least 35% of profits.