Islamic Arab Insurance Company

1. Company Overview & Earnings Context

Islamic Arab Insurance Co. (SALAMA) PJSC is a Dubai-based takaful insurance company listed on the Dubai Financial Market (DFM). The company operates across general takaful and family takaful businesses in accordance with Islamic Shari’ah principles.

SALAMA reported a strong improvement in profitability in H1 2026, despite lower takaful revenue. Profit attributable to shareholders increased to AED 26.8 million, compared with AED 5.7 million in H1 2025.

2. Financial Performance Snapshot

• Takaful Revenue: AED 469.7 Million (-8.9% YoY)

• Takaful Service Result: AED 28.3 Million, vs. a loss of AED 1.9 million

• Net Investment Result: AED 120.6 Million (+91.8% YoY)

• Net Takaful & Investment Result: AED 52.0 Million (+192.4% YoY)

• Profit Before Tax: AED 34.6 Million (+154.8% YoY)

• Net Profit: AED 28.3 Million (+242.8% YoY)

• Profit Attributable to Shareholders: AED 26.8 Million (+370.2% YoY)

• EPS: AED 0.044, compared with AED 0.006 in H1 2025

Compared with H1 2025:

• Takaful revenue declined from AED 515.4 million to AED 469.7 million.

• Takaful service result improved from a AED 1.9 million loss to a AED 28.3 million profit.

• Net investment result nearly doubled from AED 62.9 million to AED 120.6 million.

• Profit before tax increased from AED 13.6 million to AED 34.6 million.

• Net profit increased from AED 8.2 million to AED 28.3 million.

• Profit attributable to shareholders increased from AED 5.7 million to AED 26.8 million.

3. Operational Highlights & Key Metrics

• Total Assets: AED 3.36 Billion

• Total Liabilities: AED 2.83 Billion

• Total Equity: AED 531.6 Million

• Equity Attributable to Shareholders: AED 469.1 Million

• Investment Securities: AED 289.2 Million

• Cash & Bank Balances: AED 292.8 Million

• Takaful Contract Liabilities: AED 2.47 Billion

• Share Capital: AED 820.0 Million

SALAMA's total assets increased to AED 3.36 billion from AED 3.24 billion at the end of 2025, while total equity increased significantly to AED 531.6 million from AED 360.0 million. The increase in equity was supported by the company's capital raising exercise during H1 2026.

4. Key Performance Drivers

A major driver of SALAMA's H1 performance was the improvement in its takaful service result, which swung from a loss of AED 1.9 million in H1 2025 to a profit of AED 28.3 million in H1 2026, despite an 8.9% decline in takaful revenue.

Investment performance also strengthened considerably. The net investment result increased 91.8% to AED 120.6 million, driven primarily by favorable performance of unit-linked investment portfolios and higher yields on deposits, wakala certificates and fixed-income investments.

Together, these factors lifted the net takaful and investment result to AED 52.0 million from AED 17.8 million, supporting the sharp increase in bottom-line profitability.

5. Capital & Balance Sheet Developments

SALAMA completed a significant capital raising transaction during H1 2026, increasing issued share capital from approximately AED 483 million to AED 820 million.

The conversion of Mandatory Convertible Sukuk resulted in the issuance of approximately 337 million new shares, with an economic value of AED 155 million. Management said the capital strengthening supports SALAMA's strategic objectives, regulatory capital requirements and long-term growth plans.

As a result, total equity stood at AED 531.6 million at 30 June 2026, while equity attributable to shareholders reached AED 469.1 million.

6. Investor Takeaway

SALAMA's H1 2026 results showed a substantial turnaround in profitability. While takaful revenue declined 8.9%, the company moved from a takaful service loss to a profit, nearly doubled its net investment result and increased net profit by more than threefold to AED 28.3 million.

The balance sheet was also strengthened through the capital raise, with total equity increasing to AED 531.6 million. However, operating cash flow remained negative at AED 74.7 million, compared with negative AED 23.5 million in H1 2025.

Key areas to monitor through H2 2026 include takaful revenue growth, sustainability of the improved takaful service result, investment performance, operating cash flow and the impact of the strengthened capital base on future growth.