Why the Genworth (ASX:GMA) share price is tumbling 6% today

The Genworth (ASX:GMA) share price is taking a dive this morning after release of the company’s full year 2020 results. Here’s the lowdown.
The post Why the Genworth (ASX:GMA) share price is tumbling 6% today appeared first on The Motley Fool Australia. –

falling asx share price represented by woman falling through mid air

Genworth Mortgage Insurance Australia Ltd (ASX: GMA) shares are tumbling lower today after the company released its financial results for the full year ending 31 December 2020 (FY20). At the time of writing, the Genworth share price has fallen 5.65% lower to $2.67.

Why is the Genworth share price sinking?

The Genworth share price is on the slide today after the business reported an underlying net loss after tax of $104.3 million for FY20. This compares to a $97 million net profit after tax during FY19.

The company experienced an underwriting loss of $234 million for the period. The FY19 underwriting result was $42.1 million.

Genworth reported it would not be declaring an interim or final dividend due to the uncertainty surrounding coronavirus and the current economic environment. The board advised that it remains committed to resuming dividend payments when appropriate.

Genworth maintained a cash and investment portfolio worth $3.4 billion as at 31 December 2020.

The company’s net-earned premium was higher for the period, totalling $312 million in FY20 compared to $298.2 million in FY19. Gross written premium jumped 29.7% from $433.2 million in FY19 to $561.7 million in FY20.

CEO comments

Addressing the company’s losses, Genworth Chief Executive Officer and Managing Director Ms Pauline Blight-Johnston said:

Genworth’s FY20 results were materially impacted by the effects of COVID-19 on the economy. While the business achieved strong toppling volume growth in Gross Written Premium (GWP), our Statutory and Underlying net profit after tax (NPAT) losses were affected by an increase in reserving to reflect anticipated future claims outcomes arising from the economic impacts of COVID-19.

Ms Blight-Johnston added:

Importantly, Genworth remains in a strong capital position, able to withstand a wide range of future claims and outcomes.

Genworth share price snapshot

Genworth provides lenders mortgage insurance (LMI) as well as capital and risk management solutions in Australia.

Over the past 12-months, the Genworth share price has fallen by around 30% after being hammered in the March 2020 bear market.

Based on the current Genworth share price, the company commands a market capitalisation of around $1.2 billion.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Genworth (ASX:GMA) share price is tumbling 6% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!