Home' Trinidad and Tobago Guardian : May 13th 2013 Contents A26
Guardian www.guardian.co.tt Monday, May 13, 2013
SAGICOR FINANCIAL CORPORATION
FOR THE YEAR ENDED MARCH 31, 2013
The Sagicor Group recorded net income from continuing operations of US$ 14.3 million
for the current period, a modest reduction from US$ 16.5 million achieved for the
comparative period in 2012. This result was achieved after accounting for the impact of
the Jamaica National Debt Exchange (NDX) of US$ 11.8 million.
Net income from continuing operations attributable to shareholders increased to
US$ 11.5 million from the corresponding amount of US$ 9.0 million in 2012. Earnings
per common share from continuing operations was US 3.6¢ and represented an
annualised return on common shareholders' equity of 8.3%.
These results are generally encouraging. Our operations in the Caribbean and in the
USA provided strong results. In Jamaica , Sagicor's local operations participated in
the NDX as part of our contribution to the national economy. In February, the Group
exchanged over US$ 600 million of Government of Jamaica (GOJ) debt securities
for new debt securities with lower market values, lower coupon rates and extended
maturities. This exchange resulted in a one-time capitalised investment loss of $11.8
million for the Group; US$ 5.7 million to shareholders. This resulted in a reduced
contribution to Group net income from the Sagicor Jamaica operating segment.
Notwithstanding this, Sagicor considers that the NDX is in the national interest, and
together with the other measures being taken by the GOJ and the Extended Fund
Facility now approved by the International Monetary Fund, these measures enhance
greatly the prospects for sustainable national economic growth and stable government
finances in the future.
Revenue from continuing operations totalled US$ 249.8 million and represented an
increase of US$ 9.7 million over the 2012 corresponding amount. Net premium revenue
recorded was US$ 164.4 million, increasing significantly by US$ 17.3 million, or 11.7%,
from 2012's total. Net investment income and other income declined by US$ 7.6
million and reflects the capital loss on GOJ debt securities referred to in the preceding
paragraph. Consistent with the growth in premium revenue, benefits and expenses
(including agents and brokers' commissions) increased by US$ 14.1 million from 2012
to US$ 232.0 million for the current period.
As mentioned in my December 31, 2012 review, I informed shareholders of our decision
to offer the operations of Sagicor Europe for sale and to present them as a discontinued
operation. This presentation has been maintained for the current period during which
these operations incurred an overall loss of US$ 6.2 million, attributable mainly to
reductions in premium revenue, and to finance costs. We are in the final stage of a sales
process and remain confident that the sale will be completed in the current quarter.
Consistent with what obtains within the Lloyd's market, while the sale will eliminate
our exposure to any catastrophe losses in the 2013 and future underwriting years, any
movement in the claims reserves of prior underwriting years will be for the account
of Sagicor. These will be reflected as part of the discontinued operations within the
Overall, after including the results from the discontinued operation and accounting for
the impact of the NDX, the net income attributable to shareholders was US$ 5.3 million
for the current period and US$ 9.2 million for the comparative period in 2012.
In the statement of financial position as of March 31, 2013, assets totalled to US$ 5.7
billion and liabilities totalled US$ 4.9 billion. During the quarter under review, Sagicor
completed the acquisition of the traditional life insurance policies of British American
Insurance Company Limited in the Eastern Caribbean.
Sagicor's Group equity in the statement of financial position totalled US$ 782.4 million.
The Group's debt, which is included in other liabilities, totalled US$ 245.9 million. The
resulting debt to equity ratio was 31.4%.
2013 has started reasonably well for Sagicor. The first quarter results were impacted
adversely by the one-time capital loss in Jamaica, but otherwise, our continuing
operations recorded favourable results. We anticipate that the current economic
environment will present specific challenges from time to time. The Board and
Management remain focused on maintaining good results and enhancing shareholder
On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for
their continued support.
May 8, 2013
Three months ended March 31
(in US currency except percentages)
Group net income from continuing operations
Shareholders' net income from continuing operations
Earnings per common share from continuing operations
Annualised return of continuing operations on common shareholders' equity
Overall Group net income
Overall Shareholders' net income
Ratio of Debt to Equity
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