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The financial restructuring carried out by the owners of Fortis Global Insurance Plc has paid off as the company is returned to the path of profitability, an impressive performance needed to woo investors.
Of course, the ability of the owners to think outside of the box to solve certain issues helped Fortis Global post a profit after tax of N5 billion as at December 2024, from a loss of N1.81 billion as at December 2024.
The company realised N7.63 billion in fair value gain on investment properties, which underpinned financial performance and salvaged the company from recording operating loss.
Insurance revenue dipped by 1.05 percent to N413.63 million in the period under review from N418.06 million the previous year.
Hitherto, investors were jittery as the company’s future was engulfed in uncertainty given recurring losses that undermined solvency position, weakened the balance sheet, and made shares unattractive.
In 2023, a court nullified the company’s liquidation, saving it from the jaws of the regulator who had appointed a receiver/liquidator to take over its assets.
It appears Fortis Global is not out of the woods yet as fair value gains are exceptional items that don’t recur often since the entity is not in the business of selling properties.
The company is still reeling from technical insolvency. For instance, it has a negative solvency margin of N6.65 billion as at December 2024, which indicates it doesn’t have enough cash to cover obligations (claims) to policyholders.
It is important to note that the insurer has been carrying out some policies which are meant to strengthen its balance sheet, bolster liquidity, and help deliver higher returns to shareholders in the form of bumper dividends and share appreciation.
It had unveiled plans to convert its N12 billion debt into equity as part of a broader capital restructuring strategy.
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