Aug 2016 Financial News

Higher GHL profit from investment returns

Aug 09, 2016

Improved investment returns has yielded a 40 per cent increase on before tax profits for Guardian Holdings Limited (GHL) in the first half of the year.

Results posted yesterday on the T&T Stock Exchange show that for the period ended June 30, the group’s profit before taxation amounted to $226 million, an increase of $65 million over the corresponding period in 2016.

Chairman Arthur Lok Jack said GHL’s investment portfolio generated “a more than satisfactory return.” Net income from investing activities increased by $115 million to $470 million from $355 million.

“Of note, this includes a significant swing in income from securities as we have commenced redeploying our stock of low yielding short-term instruments to higher-yielding longterm instruments. We will continue this shift in the composition of our investment portfolio to the benefit of our shareholders and policyholders as we continue to actively seek attractive but stable long-term income streams,” Lok Jack said.

According to the chairman, the group’s net income from insurance activities of $259 million—compared with $297 million in 2015—was adversely affected by an unusually high incidence of fire and large motor claims during the last quarter. Net earned premiums for the period remained flat compared to the corresponding period last year.

Lok Jack said: “This is as a result of persistent “soft” market rates in the motor and property classes of business which depressed net premium income. With respect to our long-term business segment, we have re-directed our sales effort to “protection” products and away from lower-margin “savings” products. At the same time we elected not to renew one large international health re-insurance treaty.

“These measures, aimed at improving overall profit margins, should bear fruit over the medium-term but contributed to the reduction in total net premium income.”

He added that GHL’s brokerage activities in the Netherlands and Dutch Caribbean produced good growth in profits and provided a stream of revenue without exposure from insurance risks. Net income from brokerage activities increased from $3 million in 2015 to $10 million in 2016, providing a good return on investment.

Lok Jack said the board is satisfied with the group’s half-year performance and “despite adverse economic headwinds, looks forward to improved operating margins and increased investment returns.”

An interim dividend of $0.21 per common share (2015: $0.19) has been recommended by GHL’s directors.

Source:
Trinidad Guardian
Tuesday August 9, 2016

http://www.guardian.co.tt/business/2016-08-08/higher-ghl-profit-investment-returns