May 2006 Financial News

Sagicor Releases First Quarter Results

May 31, 2006

All figures quoted in Barbados dollars unless otherwise stated

Sagicor Financial Corporation (SFC) reported earnings per share (EPS) of 7.1 cents for the first quarter ended March 31, 2006 up 24.56 per cent from 2005’s earnings per share or 5.7 cents.

Total revenue increased 19.20 per cent to $302.120 million as Net Premium Revenue increased 27.48 per cent and Net Investment and Other Income rose 8.87 per cent. Total benefits and expenses increased 19.86 per cent to $270.483 million driven by a 31.95 per cent increase in Expenses and a 13.83 per cent increase in Benefits.

Ultimately, Income From Ordinary Activities increased 13.84 per cent to $31.637 million. The Company’s effective tax rate fell from 17.21 per cent to 16.85 per cent while Net Income For The Period rose 14.33 per cent to $26.305 million.

Subsequent to the end of the first quarter, SFC floated debt securities in the US market which raised US $150 million. The success of the issue stemmed from the Group’s recent successful year end performance and the financial strength rating of BBB+ as assigned by Standard and Poor’s.

At the current price of TT$13.98, SFC is trading at a running price/earnings ratio of 8.42 times earnings while at the forecasted year end EPS of approximately $1.47 it is currently trading at 9.51 times earnings. Given this Company’s continued strong growth and performance we currently recommend a BUY on this share.

Sreshtha Tewari
WISE Research Team