The Helia Group Ltd (ASX: HLI) share price edged into the green on Tuesday after the company posted its H1 2024 results.
Helia shares are swapping hands at $4.05 at the time of writing as investors digest the company's numbers.
Meanwhile, the S&P/ASX 200 index (ASX: XJO) is up less than 1%.
Let's see what the company posted in its first half.
Helia share price rises despite profit declines
Key highlights from Helia's first half include the following points:
- Statutory net profit after tax (NPAT) came in at $97.0 million, down 34% from the prior corresponding period.
- Underlying NPAT dropped 22% to $106.5 million.
- Declared a fully franked interim dividend of 15.0 cents per share, up 7% from the previous year.
- Net tangible assets (NTA) per share increased by 4% to $3.63.
- Gross written premium (GWP) fell 11% to $85.9 million.
What else happened in H1 2024?
Helia says it faced a challenging operating environment in the first half of 2024, with higher interest rates and inflation contributing to a "modest increase" in customer mortgage arrears.
Despite these headwinds, national dwelling values grew by 3.7%, and Helia helped more than 12,000 families achieve "home ownership" during the half.
Investors might also remember the fiasco with the Commonwealth Bank of Australia (ASX: CBA)'s tending of its lender's mortgage insurance (LMI) contract with Helia during the period.
The company also reported it renewed a contract with a "top ten lender" without providing specifics.
Helia left the period with total cash and financial assets of $2.8 billion, down 6% from the end of 2023. Management says this was due to the combination of dividends and buybacks.
During the half, the company bought back $42 million of its own stock and has $92 million outstanding under this agreement.
Meanwhile, the board approved a dividend of 15 cents per share, a tidy 7% increase in income for shareholders.
What did management say?
Helia's CEO, Pauline Blight-Johnston, was pleased with the bottom-line results:
I am pleased to deliver another strong interim profit result reflecting Helia's operational performance and financial resilience.
Underlying NPAT is lower than the very strong prior corresponding period (pcp), primarily due to a
lower benefit from negative total incurred claims, with claims experience unusually low in both FY23
and 1H24. This strong profitability and underlying capital strength has enabled us to continue the
delivery of active and appropriate capital management for shareholders.
What's next for Helia?
Looking ahead, Helia expects to pay dividends "similar to FY23". It says this is due to its "preference" for stable dividends.
The company has set its FY24 insurance revenue guidance between $375 million and $415 million. Meanwhile, claims data is expected to hold well:
Over the course of 2H24, total incurred claims are expected to increase, but remain well below Helia's expectations of a through the cycle total incurred claims ratio of approximately 30%.
Helia share price snapshot
The Helia share price is up 11% in the past twelve months despite posting a 7% loss this year to date.
