Home' Trinidad and Tobago Guardian : April 4th 2017 Contents SAGICOR FINANCIAL CORPORATION LIMITED
FOR THE YEAR ENDED DECEMBER 31, 2016
The economic circumstances of the markets in which the Sagicor Group operated during
2016, showed little improvement over that of 2015. The US economy grew at a pace much
lower than expected, while the situation in the Caribbean was very mixed. The performance
of the Jamaican economy continued to show signs of improvement, while the economy of
Trinidad & Tobago slipped deeper into recession. The economies of Barbados, and those
of the Eastern Caribbean, enjoyed the early signs of a return to growth. However, the high
debt to GPD ratios continue to constrain the growth, and expose these economies to the
negative impact of external shocks. As a result, the environment, for the most part, reflected
these economic realities, with businesses experiencing slow revenue growth, and having to
rely heavily on strategies which emphasised conservation and operating efficiencies.
Within this context, it is my pleasure to report to you on the 2016 financial performance of
the Sagicor Group, which experienced a solid performance, with net income for the year
closing at US $109.3 million, compared to US $76.8 million in the prior year.
Net income attributable to shareholders was US $61.7 million, compared to US $34.7 million
in the prior year, an increase of US $27.0 million. Earnings per common share was US 20.0¢,
and represented an annualised return on common shareholders' equity of 12.6%, compared
to 7.0% for the prior year.
Total revenue increased by 2.7% to US $1,134.1 million, compared to the prior year amount
of US $1,104.2 million, an increase of US $29.9 million. Net premium revenue closed at US
$664.0 million, marginally under 2015's net premium revenue of US $673.9 million, and
was impacted by lower annuity business written in our USA segment, together with the
impact of the depreciation of the Jamaica Dollar to the US dollar on translated premiums.
Net investment income closed the period at US $353.4 million, up from US $322.2 million
in the prior year, driven mainly by increased realised gains on our international investment
portfolios, and exceeded the prior year amount by US $31.2 million, or 9.7%. Fees and
other revenue amounted to US $116.8 million, compared to US $109.1 million in 2015, an
improvement of US $7.7 million, or 7.1%.
Total benefits closed at US $560.4 million, and marginally exceeded the prior year amount
of US $552.9 million.
Expenses (including agents' and brokers' commissions) closed the year at US $424.2 million,
and were below the prior year amount of US $427.7. Expenses reflected the lower
commissions and related expenses, consistent with the lower premium revenue. Premium
and asset taxes were also lower when compared to the prior year, and resulted from a
reduction in premium and asset taxes in the Jamaica segment.
Total comprehensive income closed the year at US $96.7 million, compared to a loss of US
$0.6 million for the prior year. The main contributor to the improvement in comprehensive
income was an underlying improvement in net gains on financial assets of US $142.3 million.
Included in comprehensive income were net gains for the year on financial assets of US
$39.2 million, resulting from marked-to-market gains on financial assets associated with
our international portfolios. The Group experienced net declines of US $103.2 million for
the 2015 financial year. Retranslation losses amounted to US $28.5 million, compared to
US $15.7 million reported in 2015, and resulted from declines in the Jamaica dollar of US
$21.0 million and the Trinidad dollar, US $7.5 million, when compared to the United States
In the statement of financial position as at December 31, 2016, assets amounted to
US $6.5 billion, compared to US $6.4 million in the prior year. Liabilities closed at US
$5.7 billion, the same level as in 2015. Sagicor's Group equity totalled US $795.4 million, an
increase of US $56.2 million, or 7.6% over the 2015 financial year.
The Group's debt was US $395.2 million. The debt to capital ratio was 33.2%, down from
39.2% for the prior year, and was impacted by the fact that the Company redeemed all its
outstanding convertible redeemable preference shares amounting to US $120.0 million
during the year.
The Board declared dividends of US 2.5 cents per common share, payable on May 15, 2017,
which is consistent with the dividends paid on November 15, 2016, and represents a 25%
improvement on the dividend paid on May 17, 2016.
On June 8, 2016, Shareholders approved the redomiciliation of Sagicor Financial
Corporation to Bermuda. This was achieved on July 20, 2016, when the Company was
continued under Bermuda Law as Sagicor Financial Corporation Limited. This is the
first phase of a three-part process to immunise the Sagicor Group from non-investment
grade domiciles, and to protect the credit rating of the Group. The second phase is the
incorporation of a reinsurance company in Bermuda, while the third is the re-organisation of
the corporate structure to re-organise the main operating entities as direct subsidiaries of
Sagicor Financial Corporation Limited.
On December 23, 2016, S&P Global Ratings re-affirmed the credit rating of Sagicor Finance
(2015) Limited at "BB-" with stable outlook. Sagicor Finance (2015) Limited is the Sagicor
subsidiary through which the Sagicor international corporate bond was issued.
During 2017, the company will continue its focus on its corporate re-organisation, business
conservation, and process improvement to positively impact our financial performance and
overall financial condition. We recognise the challenges still facing our Caribbean Region,
and we will continue to work with other private sector institutions and governments to play
our part in the revitalisation of the economies, for the long-term benefit of our customers,
shareholders and the communities in which we operate.
On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for their
March 31, 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of December 31, 2016
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 31, 2017.
(in US currency except percentages)
Overall Group net income
Overall Shareholders' net income
Net income allocated to non-controlling interests
Ratio of Debt to Capital
Earnings per common share
Annualised return on common shareholders' equity
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