Jun 2009 Financial News

Sagicor strong enough to withstand downturn, says Chairman

Jun 02, 2009

CHAIRMAN Terence Martins has given stakeholders the assurance that the Sagicor Financial Corporation has the financial strength to withstand the ongoing global financial crisis which is presenting challenges in 2009, as it did last year.
Martins made the point in the company’s 2008 financial statements which were made available to the media. The statements are for the year ended December 31, 2008.

“We wish to assure you that Sagicor has a solid capital base and quality assets, and while we are subject to the influences of the global and regional economic environment, we are well placed to withstand the current external difficulties,” said Martins while giving an outlook for the finance company.

He remarked that officials at the company appreciate that the global financial and economic environment continues to cause much concern. According to him, we have seen many institutions, large and small, fall under the current financial and economic pressures. Martins maintained that furthermore, government, both internationally and in the Caribbean, are taking strong measures to cope with the full impact of this twin crisis.

“We know that just like you, prudence and good stewardship of our resources will see us through these twin crises,” the Chairman declared.

Since late 2007 and continuing last year and into 2009 the world economy has taken a tumble on account of financial turmoil that has seen several global financial institutions in the USA collapsing and others benefiting from government bailout to keep them afloat.

He said in the report that the impact of the crisis had manifested itself in two ways. The Chairman pointed to the declines in asset values and foreign currency rates which reduced the company’s equity reserves. While the declines in asset values was offset by a consequential reduction in long term liabilities, Martins reasoned that had “the reduction in asset values been reflected through the
income statement, the impact would have been a reduction in shareholder’s net income of US$58.5 million”.

According to him, “because the quality of these assets is sound, we fully expect the values to return as some order of normalcy returns to the financial markets”.

Highlighting some of the numbers in the report, Martins said net premium income grew a considerable 65 per cent to US$712.0 million. Net investment and other income remained steady growing 6.5 per cent to reach US$336.8 million, while recording gains on acquisitions totalling US$18.8 million. In addition net benefits were up almost 50 per cent and expenses were 32 per cent higher.

“For the Sagicor Group, earnings per share were for the year are US 34.7 cents, up from US 32.3 cents in 2007,” the Chairman stated. “We continue to be a strong Caribbean company with the capital strength and operating capability to compete internationally, while delivering good value to our Shareholders, Customers, Staff and Communities,” Martins added.


Source:
Jewel Brathwaite
Barbados Advocate
Tuesday June 2, 2009

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=4029