TIDMSFI
RNS Number : 1050Z
Sagicor Financial Corporation Ltd
15 May 2019
SAGICOR FINANCIAL CORPORATION LIMITED FINANCIAL
RESULTS FOR THE THREE MONTHSED MARCH 31, 2019
____________________________________________________________
The Sagicor Group recorded another strong performance for the
first three months to March 31, 2019. Group net income closed the
period at US $32.9 million against a prior year result of US $38.9
million. Net income attributable to shareholders from continuing
operations was US $15.1 million compared to the prior year result
of US $19.5 million. Net income to shareholders from continuing
operations in 2018 benefited from certain one-time positive
earnings releases that did not recur in 2019.
Total revenue for the Group amounted to US $523.5 million,
against a prior year amount of US $291.3 million, an increase of US
$232.2 or 80%. Revenue growth was driven primarily by the USA
business segment which generated meaningful premium growth,
amplified by our strategic decision to cease reinsuring its
premiums to third parties. Revenues grew year over year in the
Sagicor Jamaica and Sagicor Life business segments as well.
Benefits were US $347.8 million, compared to US $132.1 million
for the previous year and was consistent with the growth in premium
income. Expenses were US $131.0 million, compared to US $117.6
million for the same period in the prior year, an increase of 11%,
the growth in expenses has been impacted by the consolidation of
the Sagicor X Fund Group from October 1, 2018. Excluding this
impact expenses grew by 4%.
Group comprehensive income was US $66.5 million, compared to US
$17.0 million for the prior year. Shareholder comprehensive income
from continuing operations was US $38.2 million, compared to US
$5.4 million for the prior year. The Group benefited from
significant net gains on investments measured at Fair Value through
Other Comprehensive Income.
Sagicor benefited from strong performance in each of its three
operating segments. Net income to shareholders from continuing
operations in Sagicor Life was US $11.2 million, a strong
performance although down compared to 2018 which had one-time
factors. Net income to shareholders from continuing operations for
Sagicor Jamaica was US $10.4 million. Net income to shareholders
from continuing operations for the USA business segment increased
significantly to US $6.9 million compared to a loss in Q1 2018, as
the segment benefits from critical mass.
During the first three months of the year Sagicor Group adopted
a new accounting standard which became effective from January 1,
2019. IFRS 16, Leases, removes the distinction between operating
and financing leases and requires recognition of an asset (the
right to use the leased item) and a financial liability to pay
rentals for virtually all lease contracts.
There was no significant impact on the net assets of the Company
on the implementation of this standard.
In the statement of financial position as at March 31, 2019,
assets amounted to US $7.6 billion, and liabilities amounted to US
$6.4 billion. Group equity was US $1,202.7 million, compared to US
$ 1,135.5 million at December 31, 2018. Shareholders' equity was US
$640.4 million, compared to US $600.9 million at December 31, 2018,
and book value per share increased from US $1.96 per share at
year-end 2018 to US $2.09 per share. The Group's debt was US $480.3
million with a debt to capital ratio of 28.5%, compared to 30.2% at
December 31, 2018.
On behalf of the Board of Sagicor, I wish to thank our
Shareholders and Customers for their continued support.
Stephen McNamara
Chairman
May 9, 2019
SFCL Q1 Financial Results
Financial Highlights
Three months ended
FINANCIAL HIGHLIGHTS MARCH 31
(in US Currency except percentages) 2019 2018
------------------------------------------- ----------- --------
Total revenue $523.5m $291.3m
Overall Group net income $32.9m $38.9m
Overall shareholders' net income $15.1m $19.5m
Net income allocated to non-controlling
interests $17.0m $10.8m
Total equity $1,202.7m $931.7m
-----------
Book Value per share $2.09 $2.03
------------------------------------------- ----------- --------
Ratio of Debt to Capital 28.5% 30.4%
------------------------------------------- ----------- --------
Earnings per common share 4.9c 6.4c
Annualised return to common shareholders'
equity 9.9% 12.7%
------------------------------------------- ----------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts expressed March 31 March 31 December
in US $000 31
2019 2018 2018
(unaudited) (unaudited) (audited)
--------------------------- ------------- ------------- -----------
ASSETS
Financial investments 5,615,931 5,021,369 5,347,663
Other investments
and assets 2,023,856 1,833,988 1,960,522
Assets of discontinued
operation 0 10,502 17,239
Total assets 7,639,787 6,865,859 7,325,424
-------------
LIABILITIES
Policy liabilities 3,921,494 3,551,362 3,662,438
Other liabilities 2,515,572 2,382,788 2,527,525
Total liabilities 6,437,066 5,934,150 6,189,963
------------- -------------
EQUITY
Shareholders' equity 640,447 622,890 600,869
Participating accounts 4,672 6,043 4,078
Non-controlling interests 557,602 302,776 530,514
Total equity 1,202,721 931,709 1,135,461
-------------
Total liabilities
and equity 7,639,787 6,865,859 7,325,424
---------------------------- ------------- -------------
These financial statements have been approved for issue by the
Board of Directors on May 9, 2019.
CONSOLIDATED STATEMENT OF INCOME
Amounts expressed in US ---- Three months to ----
$000
----- March 31 -----
2019 2018
(unaudited) (unaudited)
---------------------------------------- -------------------- ---------------------
REVENUE
Net premium revenue 365,059 187,302
Net investment and other
income 158,460 103,978
Total revenue 523,519 291,280
--------------------
BENEFITS AND EXPENSES
Benefits 347,835 132,092
Expenses 130,964 117,617
Total benefits and expenses 478,799 249,709
--------------------
OTHER
Gain arising on business combinations,
acquisitions and divestitures 0 5,280
INCOME BEFORE TAXES 44,720 46,851
Income taxes (12,370) (8,381)
NET INCOME FROM CONTINUING
OPERATIONS 32,350 38,470
Net income/(loss) from discontinued
operation 517 392
NET INCOME FOR THE PERIOD 32,867 38,862
--------------------
NET INCOME ATTRIBUTABLE
TO:
Common Shareholders
From continuing operations 15,099 19,497
From discontinued operation 517 392
15,616 19,889
Participating policyholders 248 8,187
Non-controlling interests 17,003 10,786
32,867 38,862
--------------------
Basic earnings per common
share:
From continuing operations 4.9 cents 6.4 cents
From discontinued operation 0.2 cents 0.1 cents
5.1 cents 6.5 cents
--------------------
Fully diluted earnings per
common share:
From continuing operations 4.9 cents 6.2 cents
From discontinued operation 0.2 cents 0.1 cents
5.1 cents 6.3 cents
---------------------------------------- --------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Amounts expressed in ----Three months to----
US $000
----- March 31 -----
2019 2018
(unaudited) (unaudited)
------------------------------------------- -------------------- ---------------------
NET INCOME FOR THE
PERIOD 32,867 38,862
-------------------- ---------------------
Items net of tax that may be reclassified
subsequently to income:
Available for sale
financial assets:
Net gains / (losses) on investments
in debt instruments measured at FVOCI 65,935 (28,391)
Net losses / (gains) on financial
assets measured at FVOCI reclassified
to profit or loss on disposal 429 (3,637)
Net change in actuarial
liabilities (34,150) 13,163
Retranslation of foreign
currency operations 4,460 (3,041)
Other items 0 (1)
36,674 (21,907)
Items net of tax that will not be
reclassified subsequently to income:
Unrealised losses arising on revaluation
of owner occupied property (3,023) 0
Net gains on investments in equity
instruments designated at fair value
through through other comprehensive
income 17 14
OTHER COMPREHENSIVE INCOME/(LOSS)
FOR THE PERIOD 33,668 (21,893)
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD 66,535 16,969
-------------------- ---------------------
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE
TO:
Common Shareholders
From continuing operations 38,248 5,381
From discontinued operation 517 392
38,765 5,773
Participating policyholders 644 8,160
Non-controlling interests 27,126 3,036
66,535 16,969
-------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Amounts expressed Share Share Retained Participating Non-controlling
in US $000
(unaudited) Capital Premium Reserves Earnings Accounts Interest Total
--------------------------- -------- -------- --------- --------- -------------- ---------------- ----------
Three months to March
31, 2019:
Balance, beginning
of period 3,061 300,665 (76,995) 374,138 4,078 530,514 1,135,461
Prior period adjustment 0 0 0 0 0 0 0
Balance as restated 3,061 300,665 (76,995) 374,138 4,078 530,514 1,135,461
Total comprehensive
income from continuing
operations 0 0 23,149 15,099 644 27,126 66,018
Total comprehensive
income from discontinued
operation 0 0 0 517 0 0 517
Transactions with holders
of equity instruments:
Movements in treasury
shares 2 180 0 0 0 0 182
Changes in reserve
for equity compensation
benefits 0 0 440 0 0 0 440
Transfers and other
movements 0 0 1,046 (855) (50) (38) 103
--------
Balance, end of period 3,063 300,845 (52,360) 388,899 4,672 557,602 1,202,721
---------------------------- -------- -------- --------- --------- -------------- ----------------
Three months to March
31, 2018:
Balance, beginning
of period 3,059 300,470 (47,482) 367,327 865 308,089 932,328
Prior period adjustment 0 0 94 3,454 0 3,677 7,225
January 1, 2018
adjustment-change
on initial application
of IFRS 9 0 0 (217) (10,442) (2,930) (2,352) (15,941)
Balance as restated 3,059 300,470 (47,605) 360,339 (2,065) 309,414 923,612
Total comprehensive
income from continuing
operations 0 0 (14,116) 19,497 8,160 3,036 16,577
Total comprehensive
income from discontinued
operation 0 0 0 392 0 0 392
Transactions with holders
of equity instruments:
Movements in treasury
shares 0 31 0 0 0 0 31
Changes in reserve
for equity compensation
benefits 0 0 1,259 0 0 0 1,259
Dividends declared 0 0 0 0 0 (10,464) (10,464)
Transfers and other
movements 0 0 (176) (260) (52) 790 302
-------- -------- --------- --------- -------------- ----------------
Balance, end of period 3,059 300,501 (60,638) 379,968 6,043 302,776 931,709
---------------------------- -------- -------- --------- --------- -------------- ----------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts expressed in US $000 ---- Three months to ----
----- March 31 -----
2019 2018
(unaudited) (unaudited)
-------------
CASH FLOWS
Operating activities:
Cash from income, interest and taxation 185,828 19,264
Net increase in investments and operating
assets (127,967) (76,635)
Net change in operating liabilities (15,481) 65,326
42,380 7,955
Investing activities (2,340) (3,577)
Financing activities (2,590) (650)
Effects of exchange rate changes 1,171 (461)
Net change in cash and cash equivalents
- continuing operations 38,621 3,267
Net change in cash and cash equivalents
- discontinued operation 17,756 0
Cash and cash equivalents, beginning
of period 321,561 338,349
Cash and cash equivalents, end of
period 377,938 341,616
----------------------------------------------
STATEMENT OF INCOME BY SEGMENT
Amounts expressed in
US $000 Three months to March 31, 2019
(unaudited) Head
Sagicor Office
Sagicor Sagicor Life and Inter-segment
Life Jamaica USA other eliminations Total
--------- -------- --------- -------------- ---------
Total revenue 134,791 171,073 208,381 15,118 (5,844) 523,519
Total benefits and expenses 121,028 135,582 199,615 19,335 3,239 478,799
INCOME BEFORE TAXES 13,763 35,491 8,766 (4,217) (9,083) 44,720
Income taxes (2,322) (8,065) (1,869) (120) 6 (12,370)
NET INCOME FROM CONTINUING
OPERATIONS 11,441 27,426 6,897 (4,337) (9,077) 32,350
Net income / (loss) attributable
to shareholders from
continuing operations 11,193 10,433 6,897 (12,723) (701) 15,099
--------- -------- --------- -------------- ---------
Total Comprehensive income
/ (loss) attributable
to shareholders from
continuing operations 15,735 23,495 12,772 (12,950) (804) 38,248
--------- -------- --------- -------------- ---------
Three months to March 31, 2018
Head
Sagicor Office
Sagicor Sagicor Life and Inter-segment
Life Jamaica USA other eliminations Total
--------- -------- --------- -------------- ---------
NET INCOME FROM CONTINUING
OPERATIONS 35,992 21,484 (3,194) (6,945) (8,867) 38,470
--------- -------- --------- -------------- ---------
Net income / (loss) attributable
to shareholders from
continuing operations 27,805 10,550 (3,194) (15,105) (559) 19,497
--------- -------- --------- -------------- ---------
Total Comprehensive income
/ (loss) attributable
to shareholders from
continuing operations 26,199 3,002 (8,554) (15,455) 189 5,381
----------------------------------- --------- -------- --------- -------------- ---------
STATEMENT OF FINANCIAL POSITION BY SEGMENT
Amounts expressed
in US $000 March 31, 2019
---------------------------------------------------------------------------
(unaudited) Sagicor Head
Sagicor Sagicor Life Office Inter-segment
Life Jamaica USA and other eliminations Total
---------- ---------- ----------- -------------- ----------
Total assets 2,002,566 3,233,229 2,520,933 370,356 (487,297) 7,639,787
Total liabilities 1,496,675 2,363,948 2,261,366 802,374 (487,297) 6,437,066
Net assets 505,891 869,281 259,567 (432,018) - 1,202,721
March 31, 2018
---------------------------------------------------------------------------
Sagicor Head
Sagicor Sagicor Life Office Inter-segment
Life Jamaica USA and other eliminations Total
---------- ---------- ----------- -------------- ----------
Net assets 573,366 549,305 232,325 (423,287) - 931,709
---------- ---------- ----------- -------------- ----------
PRODUCTS AND SERVICES
Total external revenues relating to the Group's
products and services are summarised as follows:
Amounts expressed in ----Three months
US $000 to----
----- March 31 -----
2019 2018
(unaudited) (unaudited)
------------------
Life, health and annuity
insurance contracts issued
to individuals 364,758 164,235
Life, health and annuity
insurance and pension
administration contracts
issued to groups 70,274 69,816
Property and casualty
insurance 11,854 11,586
Banking, investment management
and other financial services 43,526 40,001
Other revenues 33,107 5,642
523,519 291,280
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF
PREPARATION
These condensed interim financial statements have been prepared
in accordance with the accounting policies set out in note
2 of the December 31, 2018 audited financial statements, except
for the adoption of IFRS 16 - Leases'. This standard became
effective from January 1, 2019.
In accordance with the transition provisions in IFRS 16, the
standard has been implemented using the modified retrospective
method with no restatement of comparative information. In
applying IFRS 16 for the first time, the group has used the
practical expedients permitted by the standard.
---------------------------------------------------------------------------------
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