Apr 2015 Financial News

Sagicor earnings up by US$4.1m

Apr 07, 2015

The Sagicor Group has earned net income of US$73.9 million for 2014. This is an increase over the US$4.1 million for 2013.

Chairman Stephen McNamara said the group’s businesses in the Caribbean and United States recorded net income of US$100.3 million for 2014, compared to US 79.6 million for 2013—an increase of US$20.7 million.

“Net income from continuing operations attributable to shareholders was US$53.7 million, compared to the prior year result of US$39.1 million, an improvement of US $14.6 million. Earnings per common share from continuing operations was US17.3 cents, and represented an annualised return on common shareholders’ equity of 11.2 per cent,” he said.

“Total revenue closed the year at US$1,045.2 million, compared to the prior year amount of US $1,039.5 million. Net premium revenue stood at US$625.6 million, compared to US$657.0 million for the prior year. When compared to 2013, the lower premium income resulted from lower new annuity business written in our USA segment, together with the impact of the deterioration of the Jamaica dollar to the US dollar on translated premiums in US dollars in 2014.”

The group’s net investment income for the period of US$307.2 million was an improvement over the US$279.4 million recorded in 2013. Fees and other revenue amounted to US$83.3 million, compared to US$103.1 million in 2013, and was impacted by the lower reinsurance commissions earned as a result of lower new annuity business written in the United States segment.

McNamara said on June 27, 2014, the group completed acquisition of RBC Royal Bank’s Jamaica banking operations, and rebranded the business as Sagicor Bank.

He said: “After determining the fair value of acquired assets and liabilities of the business, the group recorded negative goodwill on acquisition of US$29.1 million.

At the same time, the Jamaica segment incurred US$10.5 million in integration, restructuring and re-branding costs associated with the acquisition. These non-recurring costs have been included in administrative expenses.

“Total benefits incurred from continuing operations totalled US$542.2 million, and is a reduction from the comparative amount in 2013 of US$592.8 million. This reduction is the result of the lower annuity business written in the USA segment, together with the impact of the deterioration of the Jamaica dollar to the US dollar on the Jamaica segment.

There was an improvement in total comprehensive income with net gains on financial assets of US$15.6 million and net gains on defined benefit plans of US $13.2 million.

“A decline in the Jamaica dollar against the US dollar contributed to currency retranslation losses of US$22.0 million. The Jamaica dollar depreciated against the US dollar by 7.8 per cent during 2014, compared to 14 per cent during 2013. With the continued improvement in the Jamaican economy, we expect the currency to stabilise against the US dollar and further depreciation to be lower than previous years,” McNamara said.

Source:
Trinidad Guardian, A16
Monday April 6, 2015