Great Eastern

Great Eastern: 2Q14 topline figures deteriorated but not all is bad. Total weighted new sales dropped 16% to $219.9m and new business embedded value dropped 7% to $99.1m, bring operating profit lower by 8% to $142.9m. Stripping tax provisions, operating profit rose due to better product sales mix, lower claims and growing in-force business. Bottomline figures improved, non-operating profit reversed losses to $72.2m gains backed by unrealized MTM gains from rising LT interest rates and narrowing credit and swap spreads. Profit attributable to shareholders for 2Q is $244.6m compared to $18.6m same time last year due to unrealized MTM gains in insurance funds from rising LT interest rates and narrowing credit and swap spreads as well as a $9.6m increase in shareholders’ fund to $37.6m. Company declared interim dividend of 10 cents. Great Eastern is trading at annualized 2Q14 P/E of 22.7x