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Earnings Report

Takaful Emarat

Q1 26 NEUTRAL LOW Impact

1. Company Overview & Earnings Context

Takaful Emarat - Insurance (PSC) reported significantly improved operational performance in Q1 2026 driven by strong takaful revenue growth and improved underwriting performance, although large investment losses and operating expenses continued to weigh on shareholder profitability. The Group operates across health, life, credit, and savings takaful businesses in the UAE.

Management continued focusing on operational restructuring, underwriting improvement, liquidity enhancement, and regulatory compliance during the quarter while monitoring capital adequacy requirements and solvency restoration plans.

2. Financial Performance Snapshot

  • Takaful revenue: AED 167.2M

  • Takaful service result: AED 45.4M

  • Net takaful income: AED 45.5M

  • Investment loss attributable to shareholders: AED (16.1M)

  • Wakala fees: AED 40.0M

  • Loss before tax attributable to shareholders: AED (15.9M)

  • Net loss after tax attributable to shareholders: AED (13.7M)

  • Basic & diluted loss per share: AED (0.067)

Compared to Q1 2025:

  • Takaful revenue increased from AED 136.2M to AED 167.2M

  • Takaful service result increased from AED 27.4M to AED 45.4M

  • Net shareholder loss widened from AED (4.1M) to AED (13.7M)

Additional highlights:

  • Strong operational improvement in participants’ fund generated a surplus of AED 5.9M

  • Unrealized losses on investments significantly impacted shareholder profitability

3. Operational Highlights & Key Metrics

  • Total assets: AED 1.04B

  • Total shareholders’ equity: AED 152.1M

  • Cash & cash equivalents: AED 309.9M

  • Investment properties: AED 94.3M

  • Investments at FVTPL: AED 395.4M

  • Retakaful contract assets: AED 73.5M

  • Takaful contract liabilities: AED 717.9M

Business mix highlights:

  • Medical takaful remained the largest contributor to contributions

  • Gross written contributions reached AED 196.4M

  • UAE-based investments totaled AED 149.7M

  • International investments totaled AED 245.7M

Additional highlights:

  • Net cash generated from investing activities reached AED 44.4M

  • Treasury shares increased significantly during the quarter

  • Investment portfolio remained heavily exposed to mutual funds and equity investments

4. Key Performance Drivers

  • Strong growth in takaful revenue significantly improved operational performance

  • Improved underwriting and claims experience boosted takaful service profitability

  • Large unrealized losses on investment portfolio negatively impacted shareholder earnings

  • Higher wakala fees supported operational income generation

  • Increased operating expenses and policy acquisition costs continued weighing on bottom-line profitability

The Group also recorded:

  • AED 28.4M unrealized loss on investments at FVTPL

  • AED 196.4M gross written contributions during the quarter

  • AED 45.0M net disposal of investments at FVTPL

  • AED 25.9M increase in cash and cash equivalents during Q1 2026

5. Outlook & Forward Guidance

  • Management remains focused on restoring regulatory solvency compliance and strengthening capital adequacy

  • Continued operational restructuring and underwriting discipline remain strategic priorities

  • The Group continues implementing business transformation initiatives to improve long-term profitability

  • Focus remains on improving investment portfolio quality and reducing earnings volatility

  • Management continues working with regulators regarding solvency restoration and business plans

The auditor highlighted that the Group did not meet Minimum Capital Requirement, Solvency Capital Requirement, and Minimum Guarantee Fund requirements as at 31 March 2026, with compliance dependent on successful implementation of its business plan and regulatory approvals.

6. ???? Investor Takeaway

Takaful Emarat delivered strong operational and underwriting improvement in Q1 2026 with significantly higher takaful revenue and service profitability, although substantial investment losses and ongoing solvency challenges continued impacting overall shareholder earnings and financial position.