UAE-based Islamic insurer Takaful Emarat has reported a loss of AED 5.88 million ($1.6 million) in Q2 2022, the latest addition to the company's losses that already have prompted its auditors to raise doubts about its ability to continue as a going concern.
The company has failed to meet the minimum capital requirements of AED 100 million, auditors EY said, adding that the group’s ability to comply with solvency requirements depends on the effective implementation of the business plan submitted to the Central Bank of the UAE.
Results published by the Dubai-based Islamic insurer to Dubai Financial Market (DFM) showed its Q2 losses grew year-on-year from AED 2.59 million Q2 2021.
The loss for H1 2022 was AED 5.37 million, compared with a loss of AED 7.14 million in H1 2021.
A material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern, EY noted.
Gross contributions in Q2 written were AED 60.57 million in Q2 2022 down from AED 114.4 million YoY and fell to AED 205.5 million in H1 2022 from AED 344 million YoY.
Takaful Emarat’s share price fell by between 9.76% and 10% on Wednesday, Thursday and Friday last week.
The company issued a statement today (Monday) regarding its share price, saying it does not have any technical or operational information to disclose.
Takaful Emarat, along with Dana Gas, and Arab Islamic Insurance (Salama), is invested in by the Shuaa GMC-managed Goldilocks Fund, recently acquired by Eshraq Investments in a share swap deal.
Accumulated losses of Salama
Salama announced its Q2 financial results today, including AED 383.9 million accumulated losses, which it said dated back to as early as 2012-13, attributed to factors including its lossmaking UAE motor business as well as floods in Thailand.
The company announced a total comprehensive loss of AED 4 million in Q2 2022, down from a loss of AED 16.7 million year-on-year.
Chairman Jassim Alseddiqi, who is also chairman of Eshraq Investments: said: “The first six months of the year have been pivotal for Salama, as we have made visible progress in bringing innovative takaful solutions to more segments of the population - all thanks to our well-executed digital-led business transformation initiatives.”
Alsediqqi said he was “optimistic” about progress that would be made during the remainder of 2022.
The company also saw the resignation of a board member, Mohammed Hussain Mohammed, for personal reasons last week.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)