Veritas Kapital Grows Q1 Revenue by 16% as Profit Declines, Projects N788.87m Q2 Earnings

Veritas Kapital Assurance Plc has reported a strong revenue performance for the first quarter ended March 31, 2026, even as rising costs and tax obligations weighed on its net earnings, while the company projects a more modest profit outlook for the second quarter.

In two separate filings at the Nigerian Exchange Limited (NGX) on Thursday, the company released its consolidated and separate unaudited financial statements for the first quarter as well as the earning forecast for the second quarter ending June 30, 2026.

Both filings were signed by the Chief Financial Officer, Mujeed Somorin, and the Managing Director and Chief Executive Officer, Adaobi Nwakuche.

Q1 Performance: Revenue Up, Profit Under Pressure

The insurer posted insurance revenue of N5.37 billion in Q1 2026, representing a 16 per cent increase from N4.63 billion recorded in the same period of 2025.

Despite this growth, profitability showed mixed signals as profit before tax rose by 14 per cent to N1.89 billion from N1.66 billion in the prior year, reflecting improved core earnings and underwriting performance.

However, a sharp increase in tax expenses dampened the bottom line. Details of the report showed that the company’s tax charge rose significantly to N349.88 million in 2026, compared with N41.33 million in 2025.

Consequently, profit after tax declined by 5 per cent to N1.54 billion, down from N1.62 billion recorded in the corresponding period of the previous year.

Further analysis of the results shows that insurance service expenses surged to N2.12 billion from N644.40 million, indicating higher claims and operating costs.

Nevertheless, the insurance service result improved to N2.27 billion from N1.85 billion, supported by better underwriting and lower reinsurance-related costs.

Q2 Outlook: Moderate Profit Forecast Amid Cash Pressure

Looking ahead, Veritas Kapital has projected a profit after tax of N788.87 million for the second quarter ending June 30, 2026, based on expected insurance revenue of N6.19 billion.

The forecast indicates an insurance service result of N1.67 billion, after accounting for insurance service expenses of N2.33 billion and net expenses from reinsurance contracts held of N2.18 billion.

Net investment income is projected at N314.66 million, while profit before tax is expected to come in at N1.11 billion.

After an anticipated tax expense of N319.85 million, the company expects to close the quarter with profit after tax of N788.87 million.

However, the outlook points to liquidity pressure, with net cash flow from operating activities projected at a negative N5.11 billion. Cash from investing activities is expected to provide some relief at N454.06 million.

The forecast also shows that cash and bank balances may decline from N8.26 billion at the beginning of the period to N3.60 billion by the end of the quarter.