SALAMA Reports Improved Equity and Profitability

Islamic Arab Insurance Company, better known as SALAMA, has announced its financial results for the first nine months of 2025, revealing a strategic focus on strengthening its balance sheet and improving underlying profitability. Despite a decrease in net profit to AED 11.1 million from AED 30.4 million in the same period last year, the company's performance signals a positive trajectory when one-off items are excluded.

Last year's results were bolstered by a non-recurring foreign-exchange gain of AED 19.4 million. Excluding this, SALAMA's core business shows a stable year-on-year improvement, underscoring the resilience of its operations amidst ongoing portfolio optimization and disciplined underwriting strategies.

One of the highlights of SALAMA's latest financial report is the significant improvement in comprehensive income, which soared to AED 16 million compared to a loss of AED 33.8 million in the prior year. This turnaround is attributed to stronger investment performance and enhanced operational efficiency.

In terms of liabilities, SALAMA reported a decline to AED 2.83 billion from AED 2.97 billion, while shareholders' equity increased to AED 302.2 million, up from AED 284 million at the end of 2024. This improvement in equity positions the company well for its planned Mandatory Convertible Sukuk (MCS) capital raise of up to AED 175 million, aimed at further bolstering its financial foundation.

While takaful revenue saw a slight decline to AED 768.7 million from AED 802.8 million last year, this aligns with SALAMA's strategic priority of focusing on quality and profitability over sheer volume expansion. This disciplined approach is echoed by Mr. Essa Ali Bin Salem Alzaabi, Chairman of SALAMA, who emphasized the company's commitment to strengthening its financial foundations.

Group CEO Mr. Mohamed Ali Bouabane highlighted the positive results from disciplined underwriting, expense control, and portfolio rebalancing, which have contributed to improved underlying profitability. The upcoming MCS issuance is seen as a pivotal step in completing SALAMA's capital restoration and accelerating growth.

Considering the company's strategic initiatives and current financial health, a recommendation to hold the instrument seems prudent. SALAMA's focus on long-term value creation for policyholders and shareholders, combined with its vision of being the region's most trusted Takaful provider, suggests potential for future growth. However, investors should remain watchful of market conditions and the company's execution of its strategic plans.