Sun Nepal Life Insurance Q4 Results: Strong Revenue Growth but Margins Ease

Sun Nepal Life Insurance Company Limited (SNLI) has released its audited fourth-quarter results for FY 2024/25, showing solid revenue growth and strong policy expansion, although profitability margins have narrowed compared to last year.

The company reported a total revenue of Rs. 5.35 billion in Q4, up 3.72% year-on-year compared to Rs. 4.45 billion in the same quarter last year. Sequentially, revenue showed steady growth from Rs. 4.02 billion in Q3 and Rs. 2.65 billion in Q2, reflecting improved business momentum across the fiscal year.

The gross profit stood at Rs. 1.27 billion, with a gross margin of 23.78%, slightly lower than last year’s 28.07% but higher than Q3’s 20.16%. This indicates the company maintained decent efficiency despite rising operating costs.

Net income came in at Rs. 542.48 million, compared to Rs. 574.97 million in Q4 last year, showing a mild decline. The net profit margin slipped to 10.14%, from 12.91% in the same quarter last year. While profit dipped slightly, SNLI has consistently delivered positive earnings in all four quarters this fiscal year.

Return indicators reflected a modest slowdown. Return on Assets (ROA) stood at 3.39%, down from 4.64% in Q4 last year, while Return on Equity (ROE) was 8.08%, compared to 10.35% a year earlier.

On a per-share basis, EPS (annualized) came in at Rs. 10.83, lower than Rs. 14.51 in Q4 of FY 2023/24. The PE ratio was 45.30, reflecting strong investor valuation relative to earnings. The book value per share declined to Rs. 154.35 from Rs. 157.87 last year. However, the market value per share remained strong at Rs. 490.64, trading well above book value, despite falling from Rs. 640.48 in Q3.

Insurance Business Performance

• Total enforced policies surged to 1,065,320, up 37.54% YoY, signaling robust expansion.

• First-year premium collections rose sharply to Rs. 1.74 billion (+205.4% YoY), showing strong new business inflows.

• Single premium collections fell 14% YoY to Rs. 854.89 million, compared to Rs. 994.07 million last year.

• Renewal premiums improved to Rs. 2.80 billion (+20.54% YoY), demonstrating sustained policyholder retention.

• Claims paid jumped to 2,133 (+80.15% YoY), indicating higher benefit payouts.

• Outstanding claims rose significantly to 1,775, compared to 559 in Q4 last year, reflecting pending obligations.

• Long-term investments expanded to Rs. 12.81 billion, from Rs. 9.23 billion a year ago, strengthening asset backing.

Dividend for FY 2024/25 has not been declared.