Nov 2015 Financial News

Sagicor Group income up by 70.5 per cent

Nov 17, 2015

The Sagicor Group recorded a 70.5 per cent increase in net income and a 72.6 per cent increase in earnings per share in its operations in the Caribbean and United States for nine months ended September 30.

The group’s latest financial results, which were published yesterday, saw net income up to US$38.7 million from the previous year’s US$22.7 million, along with an increase in earnings per share from US7.3 cents to US12.6 cents.

Total revenue increased to US$807.9 million, compared to US$751.4 million for the corresponding period in 2014—an increase of 7.5 per cent and net premium revenue closed at US $488 million, compared to US $457.2 million, an increase of US$30.8 million.

In his report to shareholders on the group’s latest results, Sagicor chairman Stephen McNamara said: “Net investment and other income was US$319.8 million, compared to US$294.2 million, an increase of US$25.6 million or 8.7 per cent, and includes the impact of the RBC Royal Bank’s operation in Jamaica, which was acquired on June 27, 2014.

“Total benefits closed at US$417 million and was below the prior year amount, US$425.4 million. Expenses increased to US$313.4 million, compared to US$273.1 million for the previous year. The increase in expenses included higher asset taxes, and reflected expenses incurred with the inclusion of the operation and integration of the RBC Royal Bank’s Jamaica banking operation for nine months as compared to three months for the prior period.”

McNamara said the group incurred additional finance costs related to a US$320 million bond issued on August 11 and early redemption of US$150 million in senior notes on September 10.

He said the group experienced mark-to-market changes on financial assets associated with its international portfolios.

“These resulted from volatility in global bond prices, reflecting concerns over the economic slowdown in China, and concerns over when the Federal Reserve will raise interest rates. A decline in the Jamaica dollar resulted in currency retranslation losses of US$10.8 million,” he said.

“The discontinued operation represents our UK business, which was sold on December 23, 2013. The terms of the sale required the Sagicor Group to retain an interest in the 2011, 2012 and 2013 underwriting years of account, subject to a limit denominated in pounds sterling. The company reported in its first quarter results that management had negotiated reinsurance to cover the residual exposure at a cost of US$12.6 million.

“However, the underlying agreements were not executed and the group has therefore recorded its exposure in these financial statements under the original sale agreement. For the nine months ended September 2015, the discontinued business experienced a loss of US$18.5 million, resulting from adverse movements in claims reserves. The maximum residual contingent exposure under the sale agreement is approximately US $5 million.”

The Sagicor Group’s total assets reached US $6.4 billion and shareholders’ equity was US $719.9 million, compared to US $726.7 million. The group’s debt was US$466.9 million.

McNamara said the group’s board and management “will continue to carefully navigate the economic challenges being faced in some of the countries in which we operate; along with the emerging volatility within global investment markets. We will continue to ensure delivery of value to our customers and competitive returns to our investors.”

Source:
Trinidad Guardian
Tuesday November 17, 2015

http://www.guardian.co.tt/business/2015-11-17/sagicor-group-income-705-cent