Home' Trinidad and Tobago Guardian : August 24th 2017 Contents BG12 | STOCKS
BUSINESS GUARDIAN guardian.co.tt AUGUST 24 • 2017
Assuria benefits from devaluation in 2016
Suriname-based Assuria NV is
the parent of locally operating
Gulf Insurance Ltd and Assuria
Life (T&T) Ltd (formerly, Mega
The Suriname dollar declined
from Sr$4.04 to the US dollar as at December
2015 to Sr$7.49 as at last December. Its econ-
omy shrunk by 9 per cent and annual inflation
registered at 55.5 per cent; weaker prices for
gold and oil underpinned this limp economic
outturn. Let us now review Assuria's results
to December 2016.
The large devaluation of the Suriname dollar
against the US dollar precipitated a huge in-
crease in the values of several components of
both its assets and liabilities. Most companies
have more assets than liabilities in US dollars.
Total assets expanded by almost 59 per cent,
moving from Sr$1.39 billion to Sr$2.2 billion.
Financial investments benefitted to the
greatest extent, moving by 72.4 per cent to
Sr$1.48 billion from Sr$856 million. The held
to maturity component expanded to Sr$797.5
million from Sr$438.7 million or by nearly 82
per cent; most of this comprises term deposits
of Sr$717 million, a large portion of which is
denominated in foreign currency.
The loans receivable component closed at
Sr$281.9 million from Sr$182.9 million, of
which the largest constituent was mortgag-
es of Sr$218.4 million. The trading portfolio
component increased from Sr$234.6 million to
Sr$397.2 million, of which the largest element
was Sr$376.6 million in trading securities.
The value of its investment in non-consol-
idated participations dropped to Sr$71.5 mil-
lion from Sr$183.2 million. This represented its
44 per cent stake in Der Surinaamsche Bank
(DSB). The lower value resulted from two ad-
justments; in 2015, DSB's perpetual bond loan
was incorrectly included in the value while, in
2016, the bank experienced a loss. The value
of the ten per cent stock dividend was treated
Real estate investments rose to Sr$186.1
million from Sr$104.4 million. The holdings
of its 50 per cent owned DSB-Assuria Vast-
goed Maatschappij NV (DAVG), which is an
asset management and real estate company,
along with Assuria Life (T&T) Ltd holdings
are included here. The increase represented
the revaluations of the various components;
DAVG's portion accounted for Sr$119 million.
Tangible fixed assets advanced to Sr$145.4
million from Sr$82.4 million. All components
benefitted from revaluation adjustments. In
particular, helped by a revaluation of Sr$52.9
million, the property element climbed to
Sr$124.6 million from Sr$70.1 million.
Insurance related receivables improved to
Sr$94.8 million from Sr$54 million. Other
receivables climbed to Sr$99.6 million from
Sr$48.8 million. The investment debtors com-
ponent moved from Sr$26.9 million to Sr$50.3
million; within this category, mortgages rose
from Sr$9.4 million to Sr$19.7 million. In ad-
dition, the retirement benefit asset of Assuria
Life (T&T) Ltd advanced from Sr$9 million to
Cash and cash equivalents climbed from
Sr$45.8 million to Sr$113.4 million, none of
which is restricted. The largest element, cur-
rent accounts, rose to Sr$87.6 million from
Sr$40.1 million. The actual cash on hand was
little changed at Sr$1.7 million for both periods.
Total liabilities expanded to Sr$1.90 billion
from Sr$1.08 billion. Insurance related provi-
sions increased to Sr$1.5 billion from Sr$901.8
The life insurance portion closed at Sr$1.28
billion from Sr$739 million while the non-life
component ended at Sr$226.6 million from
Sr$162.9 million. In the latter's case, the larg-
est elements were motor insurance (Sr$86.3
million) and fire insurance (Sr$75.3 million).
Other long-term liabilities grew to Sr$136.3
million from Sr$62 million. Of this total,
Sr$108.8 million reflected long-term loans
of DAVG, which is largely denominated in US
dollars. A new element was Sr$21.5 million
(about US$2.88 million) in new loans assumed
by Assuria Life (T&T) Ltd.
Deferred tax liabilities expanded to Sr$94
million from Sr$19.3 million. This value is con-
centrated under the Suriname-based general
insurance (Sr$31.3 million) and life insurance
(Sr$44.3 million) companies. Taxes rose from
Sr$21.6 million to Sr$45.4 million. The largest
component was Sr$33 million under income
Other liabilities increased from Sr$34 million
to Sr$46.9 million. The short-term portion of
DAVG's debt was Sr$7.24 million while accrued
expenses accounted for Sr$11 million and profit
sharing contributed Sr$8 million.
Total equity (after appropriations) rose to
Sr$300.8 million from Sr$297.9 million. Ex-
cluding minority interests of Sr$2.6 million,
shareholders' equity advanced to Sr$298.2
million from Sr$296.9 million.
Reserves increased to Sr$297.5 million from
Sr$296.3 million. The net profit of Sr$67.9 mil-
lion along with property revaluations (Sr$33.5
million) and currency adjustments of Sr$3.9
million added to the opening balance. However,
dividends of Sr$11 million along with negative
adjustments related to DSB of Sr$93.1 million
lowered the closing figure.
Stated capital was unchanged at Sr$655.4
million. With 6,553,801 shares outstanding, the
book value of each share edged up to Sr$45.50
from December 2015's Sr$45.31.
Income and profit
Assuria's total net premium income im-
proved by 54.6 per cent to Sr$467.6 million
from Sr$302.4 million. Life insurance net
premiums expanded from Sr$116.1 million
to Sr$171.9 million or by 48 per cent. General
insurance net premiums rose by 58.7 per cent
to Sr$295.7 million from Sr$186.3 million.
In the general insurance segment, medical
insurance grew by 58.7 per cent to Sr$133.3
million from Sr$84 million while motor in-
surance expanded by 65 per cent to Sr$96.7
million from Sr$58.6 million.
Realised investment income increased by
54.6 per cent to Sr$90.9 million from Sr$58.8
million. This improvement was concentrat-
ed under term deposits (Sr$37.6 million) and
mortgages of Sr$19.4 million.
The unrealised investment income relates to
revaluation of its trading securities; this meas-
ure improved to Sr$4.4 million from Sr$3.6
million. Other income more than doubled to
Sr$6.5 million from Sr$2.9 million. Within this
grouping, "other income" expanded to Sr$3
million from Sr$0.94 million. This component
included two one-off components.
The first was the release at Gulf Insurance
Ltd of a "VAT claim" of TT$1.0 million. The
second item was the movement of TT$0.2 mil-
lion of a retirement benefit asset at Assuria Life
(T&T) Ltd. This subsidiary also contributed
to the increased rental property component,
which rose to Sr$2.37 million from Sr$1.33
These changes saw total income improve to
Sr$569.4 million from Sr$367.8 million or by
54.8 per cent.
Total expenses expanded to Sr$560 million
from Sr$353.8 million or by 58.3 per cent.
Claims and surrenders advanced to Sr$295
million from Sr$157 million. Life insurance
claims rose to Sr$79.6 million from Sr$38.9
million. Non-Life claims reached Sr$215.4
million from Sr$118.1 million.
In this case, medical (Sr$136.4 million) and
motor claims (Sr$59.7 million) dominated.
The exchange differences on investments
related to insurance liabilities expanded from
negative Sr$63.4 million to negative Sr$372.2
Changes in insurance related provisions
increased to Sr$453.2 million from Sr$140.1
million. The life insurance portion rose to
Sr$414.2 million from Sr$134 million while the
non-life provision increased to Sr$39 million
from Sr$6.2 million.
Operating expenses advanced to Sr$152.1
million from Sr$100.5 million. The largest
components were other expenses of Sr$62.2
million (2015: Sr$32.8 million) and salaries
and personnel costs of Sr$57.7 million (2015:
Sr$37.5 million). Profit sharing and discounts
(Sr$25.3 million), change in employee benefits
plan (Sr$0.5 million) and depreciation of Sr$6.2
million comprised the remaining expenses.
These variations resulted in an operating re-
sult of Sr$9.34 million compared with 2015's
Sr$13.98 million. However, positive exchange
differences of Sr$152.9 million boosted the pre-
tax result to Sr$162.2 million from Sr$43.48
Both current and deferred taxes reduced this
figure to Sr$68.4 million (2015: Sr$43.98 mil-
lion). After allowing for minority interests, the
profit attributable to shareholders registered
at Sr$67.9 million versus Sr$43.9 million. This
result translated to EPS of Sr$10.35 compared
with the previous year's Sr$6.70.
Significantly, the table shows that both the
T&T and Guyanese operations produced posi-
tive operating results. Notably, despite having
a lower income stream, the T&T companies
delivered an operating result that was greater
than that of Suriname!
At the after-tax level (not shown), Gulf In-
surance moved from a loss of Sr$0.52 million to
a profit of Sr$7.9 million. In addition, Assuria
Life (T&T) Ltd's losses declined to Sr$2.58 mil-
lion from Sr$4.22 million. Consequently, the
T&T group produced a net profit of Sr$5.32
Helped by a superior result at its general
insurance operations, the Guyanese division
produced a small profit of Sr$45,689. The gen-
eral insurance company saw its profit swell to
Sr$1.03 million from Sr$0.34 million. How-
ever, the loss at its life operations widened to
Sr$0.98 million from Sr$0.72 million.
Both Suriname's life and general insurance
operations produced healthy profits; the for-
mer registered at Sr$94.2 million while the
latter closed at Sr$53.2 million. However, at
its medical insurance company, the 2015 profit
of Sr$7.9 million turned into a loss of Sr$11
million, mostly reflecting higher claims. Af-
ter including other operations and elimina-
tions totalling negative Sr$73.2 million, the
Suriname segment showed after-tax profit of
Share price and
Assuria's share price closed at Sr$94.75 on
both December 31, 2015 and 2016. More recent-
ly, it ended at Sr$94.50. The company normally
targets a dividend of 35 per cent of its net profit.
However, considering the distortion created
by the currency gains, the total dividend was
unchanged at Sr$1.85 for both 2015 and 2016.
The final dividend of Sr$1.55 was not paid on
shares bought from DSB (see below).
Its recent price of Sr$94.50 gives investors
a yield of 1.96 per cent. That price translates
to a P/E ratio of 9.13 and a price to book mul-
tiple of 2.08.
Assuria and DSB will inject additional funds
into DAVG, which will result in Assuria owning
51 per cent of the company and having manage-
ment control. In March 2017, Assuria bought
732,830 of its own shares from DSB for Sr$62.3
million (Sr$85.01 each).
Both the Trinidad and Suriname offices are
looking to further expand their Caribbean
presence, starting with Curaçao. Incremen-
tally, Assuria is moving towards full adoption
of IFRS for its financials.
In next week's article, we will review Cave
Sheppard's (Barbados) results for 2016.
Links Archive August 23rd 2017 August 25th 2017 Navigation Previous Page Next Page