Home' Trinidad and Tobago Guardian : March 31st 2015 Contents A54
Guardian www.guardian.co.tt Tuesday, March 31, 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2014
Amounts expressed in US $000
Property, plant and equipment
Associates and joint ventures
Income tax assets
Miscellaneous assets and receivables
Other insurance liabilities
Investment contract liabilities
Total policy liabilities
Notes and loans payable
Deposit and security liabilities
Income tax liabilities
Accounts payable and accrued liabilities
Liabilities of discontinued operation
Total shareholders' equity
Non-controlling interest in subsidiaries
Total liabilities and equity
These financial statements have been approved for issue by the Board of Directors on March 27, 2015
SAGICOR FINANCIAL CORPORATION
FOR THE YEAR ENDED DECEMBER 31, 2014
(in US currency except percentages)
Years ended December 31
Group net income from continuing operations
Group net loss from discontinued operations
Overall Group net income
Shareholders' net income from continuing operations
Shareholders' net loss from discontinued operations
Overall Shareholders' net income / (loss)
Net income allocated to non-controlling interest
Ratio of Debt to Equity
Earnings per common share from continuing operations
Annualised return of continuing operations on common shareholders' equity
I am pleased to report to you on the 2014 performance of the Sagicor Group. The Group's financial statements in
2014, consistent with 2013 and 2012, have been presented with continuing operations being separated from the
discontinued Sagicor Europe run-off operations.
The Sagicor Group had a solid year's performance, recording net income for the year of US $73.9 million,
compared to US $4.1 million for 2013.
The continuing operations, comprising our businesses in the Caribbean and in the USA, continued to perform
well, recording net income of US $100.3 million for 2014, compared to US $79.6 million for 2013, an increase of
US $20.7 million.
Net income from continuing operations attributable to shareholders was US $53.7 million, compared to the prior
year result of US $39.1 million, an improvement of US $14.6 million. Earnings per common share from continuing
operations was US 17.3 cents, and represented an annualised return on common shareholders' equity of 11.2%.
Total revenue closed the year at US $1,045.2 million, compared to the prior year amount of US $1,039.5 million.
Net premium revenue stood at US $625.6 million, compared to US $657.0 million for the prior year. When
compared to 2013, the lower premium income resulted from lower new annuity business written in our USA
segment, together with the impact of the deterioration of the Jamaica dollar to the US dollar on translated
premiums in US dollars in 2014. Net investment income closed the period at US $307.2 million, and was an
improvement over the prior year amount, which stood at US $279.4 million. Fees and other revenue amounted
to US $83.3 million, compared to US $103.1 million in 2013, and was impacted by the lower reinsurance
commissions earned as a result of lower new annuity business written in the USA segment.
On June 27, 2014, the Group completed the acquisition of RBC Royal Bank's Jamaica banking operations, and
rebranded the business as Sagicor Bank. After determining the fair value of acquired assets and liabilities of the
business, the Group recorded negative goodwill on acquisition of US $29.1 million. At the same time, the Jamaica
segment incurred US $10.5 million in integration, restructuring and re-branding costs associated with the
acquisition. These non-recurring costs have been included in Administrative Expenses.
Total benefits incurred from continuing operations totalled US $542.2 million, and is a reduction from the
comparative amount in 2013 of US $592.8 million. This reduction is the result of the lower annuity business
written in the USA segment, together with the impact of the deterioration of the Jamaica dollar to the US dollar
on the Jamaica segment.
Expenses (including agents' and brokers' commissions) closed the year at US $385.9 million, compared to US
$348.1 million for the prior year. The increase of US $37.8 million included restructuring and rebranding costs,
along with operating expenses now incurred within the banking division, following the acquisition of RBC Royal
Bank's Jamaica banking operations.
Total comprehensive income was significantly improved when compared to the prior year. Other comprehensive
income showed a positive result of US $6.7 million, compared to a loss of US $54.6 million for 2013. Included
in comprehensive income were net gains on financial assets of US $15.6 million and net gains on defined
benefit plans of US $13.2 million. A decline in the Jamaica dollar against the US dollar contributed to currency
retranslation losses of US $22.0 million. The Jamaica dollar depreciated against the US dollar by 7.8% during
2014, compared to 14% during 2013. With the continued improvement in the Jamaican economy, we expect the
currency to stabilise against the US dollar and further depreciation to be lower than previous years.
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.
Although actuarial reserves are established to cover best estimates of this liability, exposure to any fluctuations
in experience continues until 2018. During 2014, the discontinued business experienced a net loss of US $26.4
million, resulting from adverse movements in our claims provisioning for the 2013 and prior years. As part of the
2014 review of the discontinued business, we have decided to explore the purchase of reinsurance to cover this
residual exposure. This would effectively transfer any retained risk to the reinsurer, and would effectively close
this discontinued operation at the end of 2014. Subsequent to year-end, management completed the negotiation
of the reinsurance, at a cost of US $12.2 million. The cost of this reinsurance will be accounted for during the
2015 financial year.
In the statement of financial position as at December 31, 2014, assets amounted to US $6.2 billion, an increase of
US $0.9 billion over the amount of US $5.3 billion at December 2013. Similarly, liabilities closed at US $5.4 billion,
compared to US $4.6 billion, an increase of US $0.8 billion. The increase in assets and liabilities largely reflects
the acquisition of RBC Royal Bank's Jamaica banking operations. Sagicor's Group equity totalled US $773.5
million (2013, US $725.2 million). The Group's debt, which is included in other liabilities, totalled US $298.9
million (2013, US $290.2 million). The resulting debt to equity ratio was 38.7% compared to 40.0% for the prior
The Board has declared dividends of US 3.25 cents per preference share and US 2.0 cents per common share,
payable on May 15.
On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for their continued support.
March 27, 2015.
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