The ABI Board of Directors proposed and received approval from the General Meeting of Shareholders (GMS) via written ballot on November 30th to adjust the 2024 business plan.
Specifically, ABI reduced its insurance business revenue target by 9% compared to the plan approved by the 2024 Annual GMS, from VND 2,634 billion to VND 2,400 billion (a decrease of VND 234 billion).
 Source: VietstockFinance
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Consequently, the minimum planned pre-tax profit for 2024 decreased from VND 320 billion to VND 226 billion, a reduction of VND 94 billion, or 29.4%, from the initial plan. This adjusted profit plan is also 27% lower than the 2023 results.
The target for minimum ROE was thus reduced to 11.8%, down from the initially projected 15%. However, the 2024 dividend payout ratio remains unchanged at a minimum of 14%.
According to the ABI Board of Directors, 2024 has been a challenging year for the insurance industry’s operations, including the Company.
Specifically, the public crisis surrounding the insurance sector since 2023 shows no signs of abating, reducing society’s demand for insurance. Many insurance products have shown low growth or declined compared to 2023. The amended Law on Credit Institutions (LCI) in 2024 has created difficulties in selling insurance products at the branches of credit institutions.
Furthermore, in early September 2024, Super Typhoon Yagi, considered the strongest storm in the past 70 years, caused significant losses of life and property in most northern provinces from Thanh Hoa province onwards (a region contributing up to 40% of the country’s GDP). It also disrupted and almost entirely paralyzed production for enterprises, households, and individuals in a vast area. The recovery process is expected to be challenging and may take a minimum of six months to several years.
The losses from Super Typhoon Yagi directly impacted ABI‘s business operations, making it challenging to achieve the 2024 revenue and profit targets.
| ABI’s Net Profit by Quarter |
Looking back at Q3 2024 – the quarter affected by Typhoon Yagi, ABI‘s insurance compensation expenses increased by 93% compared to the same period last year, reaching nearly VND 294 billion. This pushed total insurance business expenses up to VND 466 billion, a 56% increase year-over-year. This was the main reason for ABI‘s net loss of over VND 16 billion in Q3 2024.
| ABI’s 9-Month Net Profit Over the Years |
The setback in Q3 caused ABI‘s cumulative net profit for the first nine months of 2024 to decrease by 39% compared to the same period last year, reaching VND 130 billion. Against the initial minimum pre-tax profit plan, ABI has achieved 51% of the profit target after nine months. Compared to the adjusted plan, ABI has accomplished 72%.
Record Date for the Remaining 2023 Dividend Payout
Also, in the resolution to obtain shareholder approval via written ballot, the ABI GMS approved the plan to pay the remaining 2023 dividend in cash at a rate of 10%.
After obtaining the GMS’s approval, ABI announced that the ex-dividend date for this cash dividend is December 12, 2024. The payment will be made starting from December 24, 2024.
With a payout ratio of 10% and 71.2 million outstanding shares, ABI is estimated to spend over VND 71 billion on this final dividend payment, completing the 20% dividend payout ratio approved by the 2024 Annual GMS. With the first payment of 10% made on August 02, 2024, the total dividend payout for 2023 amounts to over VND 142 billion.
Source: VietstockFinance
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As of June 30, 2024, ABI had two major shareholders holding 60.63% of its charter capital. The Vietnam Bank for Agriculture and Rural Development – Agribank held 52.08% of the capital, while the Vietnam National Reinsurance Corporation – Vinare owned 8.55%. They are expected to receive approximately VND 74 billion and VND 12 billion, respectively, in dividends for 2023.
