Home' Trinidad and Tobago Guardian : August 29th 2013 Contents AUGUST 2013 • WEEK FIVE www.guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG15
building its base...
OverviewTotal assets of AMBL climbed
from the restated $5.5 billion
as at December 2012 to $5.9
billion as at the end of June
2013; this represents an
improvement of 6.8 per cent.
Total liabilities rose by 9 per cent from $4 bil-
lion as at December 2012 to $4.367 billion as
at June 2013. Shareholders equity also
improved to $1.535 billion from the year-end
balance of $1.522 billion.
Primarily due to unfavourable returns on
its foreign (mostly, United States) investment
portfolio, the profit attributable to shareholders
declined from $79.3 million in the half-year
to June 2012 to $73.1 million in the first six
months of 2013. This reflected a shift in EPS
from $0.93 in 2012 to $0.85 in the current
period. The interim dividend of $0.15 remains
unchanged and is likely to be paid in Octo-
The banking segment saw its operating
income fall to $105.7 million from the $129.3
million earned for the same period in 2012.
Total expense also declined, moving from the
2012 figure of $74.1 million to $54.4 million
in the current half-year period.
Consequently, primary profit contracted
from $55.2 million in 2012 to $51.3 million.
However, dividend income, which paid in cash,
from its Tatil subsidiary of $27.65 million in
2013 and $23.26 million in 2012, helped improve
the comparative pre-tax profit figures; for
2013, this figure was $78.9 million while for
2012 it was $78.4 million.
Despite producing significantly lower oper-
ating income, the mutual funds segment deliv-
ered a respectable pre-tax profit of $1.1 million;
this compares with a loss of $1.37 million
incurred for the 2012 half-year. Total operating
income contracted to $18.5 million from the
prior half-year s $26.9 million. In a similar
vein, expenses moved from the 2012 figure of
$28.2 million to $17.1 million in the current
The life insurance segment reported a 6.2
per cent improvement in operating income,
which moved from $93.75 million in the six
months to June 2012 to $99.5 million in the
current half-year. On the other hand, expenses
increased at a slightly quicker pace, moving
up by 6.5 per cent to $97 million from the
comparative 2012 figure of $91 million. On
that basis, pre-tax profits suffered a 5.5 per
cent decline, moving from $2.72 million in
2012 to $2.57 million in the half-year to June
The general insurance segment delivered a
7.6 per cent improvement in its total operating
income, moving to $103.4 million in the current
period from the $96 million reported for the
half-year to June 2012.
Unfortunately, expenses accelerated at a
much faster clip; this measure moved from a
2012 base of $50.4 million to a 2013 figure of
$63.6 million. Consequently, the primary profit
measure fell to $39.8 million from the $45.7
million reported for the half-year to June 2012.
What helped improve the current period s
result was the inclusion of a dividend from
Tatil Life Assurance of $29.95 million, which
was paid in the form of shares. This transaction
boosted this segment s pre-tax profit for the
current period up to $69.7 million.
Both this dividend and the one paid by Tatil
to the banking parent are included under the
eliminations segment. In total, eliminations
in the current period amounted to $66.4 mil-
lion with respect to income and $57.6 million
relating to pre-tax profit.
The bank expects that adverse market
adjustments, which occurred in May and June
2013, would be corrected in the second half
of the current year. In addition, during this
period, it should complete the full acquisition
of Consolidated Finance Company Ltd from
its parent company, ANSA McAL Ltd. These
developments should stimulate a much better
performance in the second half of 2013.
The share price
AMBL s share price started 2013 at $37.23.
Surprisingly, on April 4, 2013, the price jumped
to $40.00 with only 43 shares changing hands.
Almost one month later, the next trade took
place on April 29, 2013. On that day, the price
dropped by $1.50 to $38.50, with only 818
shares traded. The largest trading day for this
year was on July 31, 2013, when 101,124 shares
traded at $38.60. Last Friday, the share price
closed at $38.58.
ANSA McAL Ltd owns 82.48 per cent of
the total issued shares of 85,605,263. This
concentration of ownership partly accounts
for the infrequent trading activity in this secu-
Rebranding to the
As at June 30 2013, the assets of Guardian
Holdings Ltd (GHL) grew by a modest 2.7 per
cent to $23 billion from the December 2012
figure of $22.5 billion. Two significant events,
the $78 million fair value loss on their bond
portfolio combined with the $31 million loss
relating to the Jamaican government s debt
restructuring programme, dragged down their
profits for the six months to June 2013.
These events saw diluted earnings per share
contract by 48 per cent to $0.42 from the
2012 half-year result of $0.81. The interim
dividend of $0.15 was maintained and will be
paid in early September.
Both organic growth (in the long-term busi-
ness) and new acquisitions (in the short-term
policies) helped net premiums written improve
by 14.4 per cent to $1.82 billion from the $1.59
billion recorded for the half-year to June 2012.
Net underwriting income improved from
less than $212 million last year to almost $250
million in the first six months of 2013; this
reflects an improvement of 17.7 per cent.
After allowing for previously mentioned
investment adjustments, net investment
income for the current period came in at
$382.3 million. This is $61.8 million or 14 per
cent less than the $444.1 million recorded for
the same period in 2012.
Overall, net income from all activities for
the current period came in at $631.9 million;
this is $24.2 million or 3.7 per cent less than
the $656 million recorded for the 2012 half-
year. Operating expenses for the current period
were jolted upward to $426.2 million from
the 2012 result of $363.5 million. This increase
was attributed to one-off items related to the
Despite a lower pre-tax profit of $151.3 mil-
lion, taxation at $38 million consumed 25 per
cent of this figure.
In the 2012 half-year, taxation of $42.1 mil-
lion represented only 17.4 per cent of pre-tax
income of $242 million. The net result showed
profit attributable to shareholders of $106.3
million versus the $195.6 million earned for
the 2012 comparative reporting period.
Looking at the segmental performance, we
see that the bulk of the adverse adjustments
(Jamaican NDX and US bond holdings) were
concentrated under the life health and pensions
business (LHP) units. This division saw its
operating profits decline from the 2012 figure
of $186.4 million to a 2013 output of $101.6
million. On a more positive note, the LHP
units delivered almost 9 per cent higher under-
writing revenue, moving from $1.26 billion
in the 2012 half-year to $1.375 in the current
Under the property and casualty (P&C)
segment, business increased from $394.3 mil-
lion in 2012 to $494.7 million in the current
period. This increase of more than $100 million
can largely be credited to the new acquisitions
of Globe Insurance in Jamaica and RSA Antilles
in Aruba and Curaçao.
Though troublesome, the fall off in profit
in this division was less dramatic. Exposure
to the Jamaican NDX, at $5.1 million, was
much lower. Also, other investing activities
improved from $51.7 million in 2012 to $70.5
million in the current period. On the negative
side, operating expenses climbed from $101
million in 2012 to $157.2 million in 2013; again,
this was largely due to one-off items relating
to the new acquisitions.
The asset management segment saw
reduced profits of $15 million, down from
2012 s $24.6 million. Income from investment
activities was $49 million in 2012, improving
to $50.8 million in the current period. Again,
the main culprit for the lower earnings was
the fair value adjustments on the foreign bond
holdings; this amounted to $17.1 million in
the current period and was $8.4 million for
the 2012 period.
The results from other companies rose dra-
matically from a loss of $22.4 million in 2012
to a robust $152.2 million profit in the 2013
On the other hand, consolidated adjust-
ments eliminated $239 million from operating
profits; in 2012, this figure resulted in the
elimination of $75.2 million in operating prof-
The company has begun to implement a
strategy to mitigate the effects of the NDX
Jamaican losses. In addition, it expects that
its core businesses will continue to do well.
Also, the company has begun a re-branding
exercise, under the Guardian Group banner,
that is expected to integrate and harmonise
its varied activities under the theme of encour-
aging their customers to "live easy".
The share price
The share price started 2013 at $18.50 and
peaked at $19.97 in mid-February 2013. There-
after, it was mostly downhill for GHL s shares.
Because of their large size, transactions on
the following trading days stand out. On March
28, 2013, 197,018 shares traded at $19.50. Then,
on April 2, 2013, 402,135 shares changed hands
at $19.50. Next, we have 585,855 shares being
traded on May 8, 2013 at a much lower price
Since the announcement of these results,
GHL s share price has weakened further. The
share price closed last week at $15.50. However,
outstanding bids to buy the share, which pre-
viously reached as low as $13.80, improved to
These prices are very close to its book value
of $13.86. Are we seeing a floor from which
GHL s share price could soon recover?
Half-year results for:
• ANSA Merchant Bank Ltd/Tatil
• The Guardian Group
Links Archive August 28th 2013 August 30th 2013 Navigation Previous Page Next Page