Takaful Emarat

1. Company Overview & Earnings Context

Takaful Emarat – Insurance (PSC) is a Dubai Financial Market-listed UAE takaful insurance company operating in health, life, credit and savings insurance in accordance with Islamic Sharia principles. The Group also includes its wholly owned investment subsidiary, Modern Tech Investment.

Takaful Emarat delivered a strong H1 2026 earnings improvement, with takaful revenue increasing to AED 335.20 million and profit attributable to shareholders nearly doubling to AED 26.66 million. The performance was supported by stronger takaful service results, higher Wakala fees, and a substantial improvement in shareholder investment income.

2. Financial Performance Snapshot

• Takaful Revenue: AED 335.20 Million (+18.1% YoY)

• Takaful Service Result: AED 84.90 Million (+30.5% YoY)

• Net Takaful Income: AED 85.16 Million (+31.1% YoY)

• Wakala Fees: AED 86.79 Million (+27.9% YoY)

• Profit Before Tax Attributable to Shareholders: AED 29.31 Million (+112.9% YoY)

• Net Profit Attributable to Shareholders: AED 26.66 Million (+91.6% YoY)

• Earnings Per Share (EPS): AED 0.13, compared with AED 0.07 in H1 2025

Compared with H1 2025:

• Takaful revenue increased from AED 283.74 million to AED 335.20 million.

• Takaful service result increased from AED 65.06 million to AED 84.90 million.

• Net takaful income increased from AED 64.98 million to AED 85.16 million.

• Wakala fees increased from AED 67.85 million to AED 86.79 million.

• Profit before tax attributable to shareholders increased from AED 13.77 million to AED 29.31 million.

• Net profit attributable to shareholders increased from AED 13.91 million to AED 26.66 million.

• EPS increased from AED 0.07 to AED 0.13.

3. Operational Highlights & Key Metrics

• Total Assets: AED 1.09 Billion

• Shareholders' Equity: AED 195.47 Million

• Participants' Assets: AED 813.48 Million

• Shareholders' Assets: AED 281.00 Million

• Cash & Bank Balances: AED 282.75 Million

• FVTPL Investments: AED 391.40 Million

• Participants' Fund Deficit: AED 0.76 Million, down from AED 6.55 million

• Qard Hassan from Shareholders: AED 0.76 million, down from AED 6.55 million

• Net Operating Cash Flow: AED -28.65 Million

Shareholders' equity increased to AED 195.47 million from AED 177.50 million at the end of 2025, while accumulated losses narrowed to AED 18.09 million from AED 30.66 million.

4. Key Performance Drivers

Takaful Emarat's stronger H1 performance was supported by growth in its core takaful business. Takaful revenue increased 18.1% YoY, while the takaful service result grew faster at 30.5% to AED 84.90 million, indicating stronger service profitability during the period.

The Group's Group Life and Medical business remained the dominant contributor, generating approximately AED 329.16 million of H1 takaful revenue, while Individual Life contributed AED 6.04 million. Takaful service expenses increased to AED 325.98 million from AED 290.19 million, partly reflecting higher incurred claims and acquisition costs as business volumes expanded.

Shareholder earnings also benefited substantially from investment performance. Investment income attributable to shareholders increased to AED 11.51 million from AED 2.63 million, while Wakala fees rose to AED 86.79 million. These gains more than offset higher policy acquisition costs and administrative expenses.

Another positive development was the improvement in the participants' fund. An AED 5.79 million surplus generated during the period reduced the participants' fund deficit from AED 6.55 million to just AED 0.76 million by 30 June 2026.

5. Outlook & Forward Considerations

Takaful Emarat did not provide specific quantitative guidance for the remainder of 2026. However, the Group's improving profitability, stronger shareholders' equity and significant reduction in the participants' fund deficit indicate progress in its financial position.

The most important issue remains regulatory solvency. At 30 June 2026, the Group did not meet the required AED 100 million Minimum Capital Requirement, AED 92.01 million Solvency Capital Requirement and AED 93.97 million Minimum Guarantee Fund requirement. Basic Own Funds stood at AED 81.86 million.

This represents a notable improvement from year-end 2025. The Minimum Capital Requirement deficit narrowed to AED 18.14 million from AED 50.14 million, while the Solvency Capital Requirement deficit improved to AED 10.14 million from AED 44.58 million. The Minimum Guarantee Fund deficit also narrowed to AED 12.11 million from AED 34.23 million.

The Group submitted a solvency plan to the Central Bank of the UAE in April 2026, with the regulator issuing a conditional no-objection in June 2026. The independent auditor specifically highlighted the solvency position as an Emphasis of Matter.

6. Investor Takeaway

Takaful Emarat delivered a strong H1 2026 earnings recovery, with takaful revenue rising 18.1% to AED 335.20 million, the takaful service result increasing 30.5%, and shareholder net profit jumping 91.6% to AED 26.66 million. EPS nearly doubled to AED 0.13, while shareholders' equity strengthened and accumulated losses narrowed materially.

The participants' fund also showed substantial improvement, with its deficit falling from AED 6.55 million to just AED 0.76 million, supported by an AED 5.79 million surplus during H1.

However, solvency remains the key risk to monitor. Although all three regulatory capital deficits improved significantly during H1, Takaful Emarat remained below the required regulatory thresholds at 30 June 2026. Operating cash flow was also negative at AED 28.65 million, compared with AED 3.25 million of positive cash flow in H1 2025. Continued profitability, capital strengthening and successful execution of the CBUAE-approved solvency plan will therefore be particularly important through H2 2026.