Home' Trinidad and Tobago Guardian : November 16th 2015 Contents A54
Guardian www.guardian.co.tt Monday, November 16, 2015
SAGICOR FINANCIAL CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015
The Sagicor Group recorded net income from continuing operations of US $60.4 million
for the nine months ended September 30, 2015, compared to the prior year result
of US $41.3 million, an increase of 46.2%. The continuing operations comprises our
businesses in the Caribbean and in the USA.
Net income from continuing operations attributable to shareholders was US $38.7 million,
compared to the prior year result of US $22.7 million, an increase of 70.5%. Earnings
per common share from continuing operations was US 12.6 cents compared to the prior
year result of 7.3 cents, an increase of 72.6%, and an annualised return on common
shareholders equity of 10.6%.
Total revenue increased to US $807.9 million, compared to US $751.4 million for the
corresponding period in 2014, an increase of 7.5%. Net premium revenue closed at
US $488.0 million, compared to US $457.2 million, an increase of US $30.8 million with
solid growth in our Sagicor Life and our Sagicor Life USA segments. Net investment
and other income was US $319.8 million, compared to US $294.2 million, an increase of
US $25.6 million or 8.7%, and includes the impact of the RBC Royal Bank s operation in
Jamaica, which was acquired on June 27, 2014. Total bene ts closed at US $417.0 million
and was below the prior year amount, US $425.4 million. Expenses increased to
US $313.4 million, compared to US $273.1 million for the previous year. The increase in
expenses included higher asset taxes, and re ected expenses incurred with the inclusion
of the operation and integration of the RBC Royal Bank s Jamaica banking operation for
nine months as compared to three months for the prior period. The group also incurred
additional nance costs when compared to the prior year. Finance costs related to
the US $320.0 million bond issued on August 11, 2015 were incurred during the period.
Additionally, nance costs were also incurred related to the early redemption of the
US $150.0 million senior notes on September 10, 2015.
Comprehensive income attributable to common shareholders from continuing operations
was a loss of US $11.1 million, compared to income of US $29.6 million for the same
period in the prior year. The Group experienced mark-to-market changes on nancial
assets associated with our international portfolios. These changes resulted from volatility
in global bond prices, re ecting concerns over the economic slowdown in China, and
concerns over when the Federal Reserve will raise interest rates. A decline in the Jamaica
dollar resulted in currency retranslation losses of US $10.8 million.
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, subject to a limit denominated
in pounds sterling. The company reported in its rst quarter results that management
had negotiated reinsurance to cover the residual exposure at a cost of US $12.6 million.
However, the underlying agreements were not executed and the Group has therefore
recorded its exposure in these nancial statements under the original sale agreement. For
the nine months ended September 2015, the discontinued business experienced a loss
of US $18.5 million, resulting from adverse movements in claims reserves. The maximum
residual contingent exposure under the sale agreement is approximately US $5 million.
The total assets of the Group reached US $6.4 billion. Shareholders equity was
US $719.9 million, compared to US $726.7 million. The Group s debt, which is included
in other liabilities, was US $466.9 million. On August 11, 2015, Sagicor re nanced its
total debt with the issuance of US $320.0 million seven-year senior notes repayable in
2022. The notes carry a xed rate of interest of 8.875% payable semi-annually, and can
be repurchased after four years. The notes were issued to re nance the existing senior
notes, convertible preference shares and a loan which matures in May 2016. Consequently
on September 10, 2015 the company redeemed the US $150.0 million 7.50% 2016 senior
notes at a price of US $160.5 million. The resulting debt to capital ratio increased from
29.3% to 39.3% over the period, and will return to normal levels when convertible
preference shares and a loan which mature in May 2016 are redeemed.
The Board and Management will continue to carefully navigate the economic challenges
being faced in some of the countries in which we operate; along with the emerging
volatility within global investment markets. We will continue to ensure delivery of value to
our customers and competitive returns to our investors.
On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for
their continued support.
October 13, 2015.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts expressed in US $000
September 30 September 30 December 31
Other investments and assets
Liabilities of discontinued operation
Total liabilities and equity
These nancial statements have been approved for issue by the Board of Directors on October 12, 2015.
(in US currency except percentages)
Nine months ended
Group net income from continuing operations
Group net loss from discontinued operations
Overall Group net income
Shareholders net income from continuing operations $38.7m
Shareholders net (loss) from discontinued operations ($18.5m)
Overall Shareholders net income/(loss)
Net income allocated to non-controlling interests
Debt to Capital
Earnings per common share from continuing
Annualised return of continuing operations on common
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