Aug 2013 Financial News

Sagicor posts US$13.3 million loss

Aug 26, 2013

The Sagicor Group suffered a loss of US$13.3 million at the end of the first half of 2013, according to the company’s half year results (H1 2013) released yesterday.

The results were released yesterday in Port-of-Spain and Bridgetown, simultaneously, via video conferencing with media from both countries. The loss is an about turn from the overall profit Sagicor posted in H1 2012, when it reported a US$24 million net income. The overall net loss to shareholders was US$22.4 million as opposed to the US$11.8 million net income to shareholders in H1 2012.

Sagicor Group chief executive officer (CEO) Dodridge Miller said he wanted to leave the loss in the past and focused on the net income from continuing operations of US$28.4 million for the first six months of 2013, an improvement of US$4 million over the comparative period in 2012.

“The Sagicor Group recorded a solid performance from continuing operations for the first six months of 2013 of US$28.4 million, compared to US$24.4 million for the same period of 2012,” Miller said. He said this was achieved “despite accounting for the impact of the Jamaica National Debt Exchange (NDX),” which represented a capital loss of US$11.8 million.

He said Sagicor’s Caribbean and US operations continued to perform well, recording growth in revenue and net income. Sagicor’s total revenue in 2013 was US$498.7 million, up from US$477.2 million in the same period last year. Its assets climbed from US$5.4947 million in 2012 to US$5.7111 in H12013.

Its equity fell from US$801.3 million to US$730.6 million. Sagicor’s share price at $6.51 yesterday is less than three times what it was five years ago. On September 24, 2008, the company’s share was worth as much as $18 on the T&T Stock Exchange.

Sagicor’s failure in Europe did not help. The good news is that “the sale (of Sagicor at Lloyd’s) will return approximately US$130 million in cash capital to the group,” Miller said. The sale is expected to be completed in the fourth quarter of 2013. The CEO said this “will remove the drag of future earnings of the group.” The bulk of the loss was the result of the failure of Sagicor’s venture into Europe.

Sagicor lost US$41.7 million in Europe, of which US$23.6 million was the operating loss, US$8 million foreign exchange and finance losses, and US$10.1 million was an impairment estimate of future losses.

Asked what lessons were learnt from the US$41.7 million loss in Europe, Miller said the first lesson learnt was that “international expansion is not without its challenges” but maintained that this was something “we knew,” and undaunted, he promised to continue “to seek new opportunities in markets outside the Caribbean where we believe the returns and the risks are acceptable to our shareholders.” Miller said Sagicor’s growth has been 20 per cent in H1 2013 in the US market.

“We are in the US. We are performing well in the US. We have been in Panama for some time. That has been a slow experience for us but we are still there and continuing to build up Panama.” He said in Chile, Sagicor’s experience was only with Lloyd’s, and there was an earthquake there. Miller said seven natural disasters that occured in 2011, were statistically due over a period of 250 years and that was what brought on the demise of Sagicor Europe.

He said after the simultaneous conference call with the Barbadian media that with global warming, it is not known if disasters will persist, and the prudent action was not to expose shareholders.


Source:
Trinidad Guardian
Saturday August 24, 2013

http://www.guardian.co.tt/business/2013-08-24/sagicor-posts-us133-million-loss