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Sagicor Fin Corp Ltd (SFI)

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Tuesday 14 November, 2017

Sagicor Fin Corp Ltd

3rd Quarter Results

RNS Number : 4511W
Sagicor Financial Corporation Ltd
14 November 2017
 

SAGICOR FINANCIAL CORPORATION LIMITED

FINANCIAL RESULTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017

 

The Sagicor Group net income for the nine months ended September 30, 2017 was US $78.1 million, compared to the prior year result of US $89.9 million. The result for the period was impacted by a net provision of US $7.5 million related to claims exposure from hurricane activity during the year, while the prior year included exchange gains amounting to US $7.9 million relating to the depreciation of the Trinidad dollar, when compared to the United States dollar on financial investments.

Net income attributable to shareholders was US $47.2 million, compared to the prior year result of US $52.0 million.

Total revenue amounted to US $910.9 million, compared to US $850.5 million for the corresponding period in 2016, an increase of US $60.4 million. Net premium revenue stood at US $558.8 million, and exceeded the prior year amount of US $492.7 million, and represents an increase of US $66.1 million, due in part to the issuance of a significant single premium annuity relating to our Jamaica segment. Net investment income and other income closed at US $352.1 million, compared to the prior year amount of US $357.8 million.

Benefits amounted to US $474.4 million for the period, compared to US $422.2 million for the previous year, an increase of US $52.2 million. This change is a result of actuarial provisions for new business including the single premium annuity in the Jamaica segment.

Expenses amounted to US $329.1 million, inclusive of US $5.0 million in non-recurring costs, compared to US $312.7 million for the same period in the prior year. Higher administration costs were also incurred as a result of the expansion of credit card and payments businesses in our banking segment.

Total comprehensive income closed the period at US $108.3 million, compared to US $112.2 million for the same period in the prior year. Included in comprehensive income were net gains on financial assets of US $36.7 million. Retranslation losses amounted to US $5.1 million, compared to losses of US $26.3 million reported in the prior year, and resulted from a decline in the Jamaica dollar when compared to the United States dollar during the period.

In the statement of financial position as at September 30, 2017, assets amounted to US $6.8 billion, and liabilities totalled US $5.9 billion. Sagicor's Group equity totalled US $884.4 million. Shareholder equity amounted to US $1.96 per share. The Group's debt, which is included in other liabilities, was US $405.6 million. The debt to capital ratio was 31.4%.

Sagicor has embarked on a programme to provide relief from the recent hurricanes. To date, Sagicor has made a financial contribution of US $300,000, as well as the provision of goods and services. Consistent with our vision to improve the lives of the people in the communities in which we operate, key initiatives include a school feeding programme to students, a mobile medical clinic and assistance to the regional airline, LIAT. We have also partnered with The University of the West Indies to host a Celebrity T20 Cricket Hurricane Relief Benefit to raise additional funds for the islands which have suffered significant damage during the passage of hurricanes Irma and Maria earlier this year.

On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for their continued support.

 

Stephen McNamara

Chairman

November 9, 2017

 

 

FINANCIAL HIGHLIGHTS

(in US currency except percentages)

Nine months ended

 SEPTEMBER 30

2017

2016

Total revenue

$910.9m

$850.5m

Overall Group net income

$78.1m

$89.9m

Overall Shareholders' net income

$47.2m

$52.0m

Net income allocated to non-controlling interests

$32.5m

$39.9m

Total equity

$884.4m

$826.8m

Ratio of Debt to Capital

31.4%

32.1%

Earnings per common share

15.5¢

16.8¢

Annualised return on common shareholders' equity

11.6%

13.7%

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Amounts expressed in US $000

 

 

 

September 30

September 30

December 31

 

 

 

 

 

2017

2016

2016

 

 

 

 

 

 (unaudited)

 (unaudited)

 (audited)

ASSETS

 

 

 

 

 

 

 

Financial investments

 

 

 

 

5,005,199

4,944,681

4,813,748

Other investments and assets

 

 

 

1,766,441

1,715,318

1,718,172

Assets of discontinued operation

 

 

 

-

438

-

Total assets

 

 

 

 

6,771,640

6,660,437

6,531,920

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Policy liabilities

 

 

 

 

3,470,707

3,357,975

3,361,060

Other liabilities

 

 

 

 

2,416,488

2,475,670

2,375,446

Total liabilities

 

 

 

 

5,887,195

5,833,645

5,736,506

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

600,159

562,613

536,149

Participating accounts

 

 

 

 

637

(355)

1,291

Non-controlling interests

 

 

 

283,649

264,534

257,974

Total equity

 

 

 

 

884,445

826,792

795,414

 

 

 

 

 

 

 

 

Total liabilities and equity

 

 

 

6,771,640

6,660,437

6,531,920

 

These financial statements have been approved for issue by the Board of Directors on November 09, 2017.

 

CONSOLIDATED STATEMENT OF INCOME

Amounts expressed in US $000

 

 

---- Nine months to ----

---- Three months to ----

 

 

 

 

----- September 30 -----

----- September 30 -----

 

 

 

 

2017

2016

2017

2016

 

 

 

 

 (unaudited)

 (unaudited)

 (unaudited)

 (unaudited)

REVENUE

 

 

 

 

 

 

 

Net premium revenue

 

 

 

558,804

492,686

218,659

173,914

Net investment and other income

 

 

352,125

357,788

129,630

123,526

Total revenue

 

 

 

910,929

850,474

348,289

297,440

 

 

 

 

 

 

 

 

BENEFITS AND EXPENSES

 

 

 

 

 

 

Benefits

 

 

 

474,373

422,192

196,377

127,366

Expenses

 

 

 

329,148

312,720

104,848

102,920

Total benefits and expenses

 

 

803,521

734,912

301,225

230,286

 

 

 

 

 

 

 

 

INCOME BEFORE TAXES

 

 

107,408

115,562

47,064

67,154

Income taxes

 

 

 

(29,303)

(27,524)

(10,070)

(11,345)

NET INCOME FROM CONTINUING OPERATIONS

78,105

88,038

36,994

55,809

Net income/(loss) from discontinued operation

-

1,850

-

(15)

NET INCOME FOR THE PERIOD

 

 

78,105

89,888

36,994

55,794

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO:

 

 

 

 

 

 

Common Shareholders

 

 

 

 

 

 

From continuing operations

 

 

47,211

50,162

28,205

35,285

From discontinued operation

 

 

-

1,850

-

(15)

 

 

 

 

47,211

52,012

28,205

35,270

Participating policyholders

 

 

(1,595)

(2,015)

(1,121)

(1,661)

Non-controlling interests

 

 

32,489

39,891

9,910

22,185

 

 

 

 

78,105

89,888

36,994

55,794

Basic earnings per common share:

 

 

 

 

 

 

From continuing operations

 

 

15.5 cents

16.2 cents

9.2 cents

11.6 cents

From discontinued operation

 

 

0.0 cents

0.6 cents

0.0 cents

0.0 cents

 

 

 

 

15.5 cents

16.8 cents

9.2 cents

11.6 cents

 

 

 

 

 

 

 

 

Fully diluted earnings per common share:

 

 

 

 

From continuing operations

 

 

15.2 cents

15.4 cents

9.0 cents

11.0 cents

From discontinued operation

 

 

0.0 cents

0.5 cents

0.0 cents

0.0 cents

 

 

 

 

15.2 cents

15.9 cents

9.0 cents

11.0 cents

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Amounts expressed in US $000

 

 

---- Nine months to ----

---- Three months to ----

 

 

 

 

----- September 30 -----

----- September 30 -----

 

 

 

 

2017

2016

2017

2016

 

 

 

 

 (unaudited)

 (unaudited)

 (unaudited)

 (unaudited)

 

 

 

 

 

 

 

 

NET INCOME FOR THE PERIOD

 

 

78,105

89,888

36,994

55,794

 

 

 

 

 

 

 

 

Items net of tax that may be reclassified subsequently to income:

 

 

 

 

Available for sale financial assets:

 

 

 

 

Unrealised gains arising on revaluation

36,670

88,640

14,983

26,570

    Gains transferred to income

6,052

(4,430)

(1,159)

(952)

Net change in actuarial liabilities

(9,630)

(35,104)

3,285

(11,719)

Retranslation of foreign currency operations

(5,148)

(26,348)

(3,302)

(5,918)

 

 

 

 

27,944

22,758

13,807

7,981

Items net of tax that will not be reclassified subsequently to income:

 

 

 

 

Gains on defined benefit plans

2,227

34

94

34

OTHER COMPREHENSIVE INCOME FOR THE PERIOD

30,171

22,292

13,901

7,515

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

108,276

112,180

50,895

63,309

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

 

 

 

 

Common Shareholders

 

 

 

 

    From continuing operations

70,222

65,343

37,557

41,393

    From discontinued operation

-

1,850

-

(15)

 

 

 

 

70,222

67,193

37,557

41,378

Participating policyholders

(492)

(1,570)

(328)

(1,300)

Non-controlling interests

38,546

46,557

13,666

23,231

 

 

 

 

108,276

112,180

50,895

63,309

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Amounts expressed in US $000

 

Share

Share

 

Retained

Participating

Non-controlling

 

 (unaudited)

 

Capital

Premium

Reserves

Earnings

Accounts

Interest

Total

 

 

 

 

 

 

 

 

 

Nine months to  September 30, 2017:

 

 

 

 

 

 

 

Balance, beginning of period

3,029

297,050

(64,795)

300,865

1,291

257,974

795,414

Total comprehensive income from continuing operations

-

-

20,806

49,416

(492)

38,546

108,276

Transactions with holders of equity instruments:

 

 

 

 

 

 

 

Allotment of common shares

21

2,021

-

-

-

-

2,042

Movements in treasury shares

6

834

-

-

-

-

840

Changes in reserve for equity compensation benefits

-

-

(45)

-

-

-

(45)

Dividends declared

-

-

-

(7,575)

-

(10,840)

(18,415)

Transfers and other movements

-

-

1,227

(2,701)

(162)

(2,031)

(3,667)

Balance, end of period

3,056

299,905

(42,807)

340,005

637

283,649

884,445

 

 

 

 

 

 

 

 

 

 Nine months to  September 30, 2016:

 

 

 

 

 

 

 

Balance, beginning of period as previously reported

299,320

-

(59,688)

266,414

1,383

231,735

739,164

Redomiciliation adjustment net of treasury shares

(296,296)

296,296

-

-

-

-

-

Balance as restated

3,024

296,296

(59,688)

266,414

1,383

231,735

739,164

Total comprehensive income from continuing operations

-

-

15,155

50,188

(1,570)

46,557

110,330

Total comprehensive income from discontinued  operation

-

-

-

1,850

-

-

1,850

Transactions with holders of equity instruments:

 

 

 

 

 

 

 

Movements in treasury shares (reallocated to conform with current presentation)

5

746

-

-

-

-

751

Changes in reserve for equity compensation benefits

-

-

1,233

-

-

-

1,233

Dividends declared

-

-

-

(11,311)

-

(10,620)

(21,931)

Transfers and other movements

-

-

(4,559)

3,260

(168)

(3,138)

(4,605)

Balance, end of period

3,029

297,042

(47,859)

310,401

(355)

264,534

826,792

 

CONSOLIDATED STATEMENT OF CASH FLOWS

Amounts expressed in US $000

 

 

 

 

 

---- Nine months to ----

 

 

 

 

 

 

----- September 30 -----

 

 

 

 

 

 

2017

2016

 

 

 

 

 

 

(unaudited)

(unaudited)

CASH FLOWS

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

Cash from income, interest and taxation

 

 

 

100,959

96,364

Net increase in investments and operating assets

 

 

 

(65,964)

(197,547)

Net change in operating liabilities

 

 

 

 

105,683

207,147

 

 

 

 

 

 

140,678

105,964

Investing activities

 

 

 

 

 

(21,319)

(14,062)

Financing activities

 

 

 

 

 

(4,093)

(110,463)

Effects of exchange rate changes

 

 

 

 

(1,317)

(3,616)

Net change in cash and cash equivalents - continuing operations

 

113,949

(22,177)

Net change in cash and cash equivalents - discontinued operation

 

-

(44,614)

Cash and cash equivalents, beginning of period

 

 

 

312,106

384,879

Cash and cash equivalents, end of period

 

 

 

426,055

318,088

 

 

STATEMENT OF INCOME BY SEGMENT

Amounts expressed in US $000

 

 Nine months to  September 30, 2017

 (unaudited)

 

Sagicor Life

Sagicor Jamaica

Sagicor Life USA

Head Office and other

Inter-segment eliminations

Total

 

 

 

 

 

 

 

 

Total revenue

 

306,238

452,418

116,700

93,574

(58,001)

910,929

Total benefits and expenses

 

249,907

365,327

102,274

72,125

13,888

803,521

INCOME BEFORE TAXES

 

56,331

87,091

14,426

21,449

(71,889)

107,408

Income taxes

 

(7,318)

(16,388)

(5,049)

(548)

-

(29,303)

NET INCOME FROM CONTINUING OPERATIONS

 

49,013

70,703

9,377

20,901

(71,889)

78,105

 

 

 

 

 

 

 

 

Net income / (loss) attributable to shareholders from continuing operations

 

50,608

34,727

9,377

(861)

(46,640)

47,211

 

 

 

 

 

 

 

 

Total Comprehensive income / (loss) attributable to shareholders from continuing operations

 

60,980

40,354

15,266

(575)

(45,803)

70,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Nine months to  September 30, 2016

 

 

Sagicor Life

Sagicor Jamaica

Sagicor Life USA

Head Office and other

Inter-segment eliminations

Total

NET INCOME FROM CONTINUING OPERATIONS

 

52,937

76,472

4,028

15,781

(61,180)

88,038

 

 

 

 

 

 

 

 

Net income / (loss) attributable to shareholders from continuing operations

 

54,952

37,560

4,028

(15,637)

(30,741)

50,162

 

 

 

 

 

 

 

 

Total Comprehensive income / (loss) attributable to shareholders from continuing operations

 

56,660

43,747

11,313

(15,814)

(30,563)

65,343

 

 

 

STATEMENT OF FINANCIAL POSITION BY SEGMENT

Amounts expressed in US $000

 

September 30, 2017

 (unaudited)

 

Sagicor Life

Sagicor Jamaica

Sagicor Life USA

Head Office and other

Inter-segment eliminations

Total

 

 

 

 

 

 

 

 

Total assets

 

1,945,046

2,813,558

1,983,877

390,993

(361,834)

6,771,640

Total liabilities

 

1,391,780

2,305,747

1,749,394

802,108

(361,834)

5,887,195

Net assets

 

553,266

507,811

234,483

(411,115)

-

884,445

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2016

 

 

Sagicor Life

Sagicor Jamaica

Sagicor Life USA

Head Office and other

Inter-segment eliminations

Total

Net assets

 

554,297

461,793

216,863

(406,161)

-

826,792

 

PRODUCTS AND SERVICES

 

 

 

 

Total external revenues relating to the Group's products and services are summarised as follows:

 

 

 

 

Amounts expressed in US $000

 

---- Nine months to ----

 

 

----- September 30 -----

 

 

2017

2016

 

 

 (unaudited)

 (unaudited)

 

 

 

 

Life, health and annuity insurance contracts issued to individuals

 

493,801

470,361

Life, health and annuity insurance and pension administration contracts issued to groups

 

243,752

214,431

Property and casualty insurance

 

30,492

26,445

Banking, investment management and other financial services

 

121,495

117,922

Other revenues 

 

21,389

21,315

 

 

910,929

850,474

 

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, 2016 audited financial statements.


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