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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Sagicor Financial Corporation Limited | LSE:SFI | London | Ordinary Share | BMG7777B1046 | COM SHS USD0.01 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 117.50 | 105.00 | 130.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMSFI
RNS Number : 3504T
Sagicor Financial Corporation Ltd
14 November 2019
Sagicor Financial Corporation Limited
Chairman's review
Q3 Financial Results
The Sagicor Group maintained a solid performance for the nine months to September 30, 2019. Group net income closed the period at US $79.5 million against a prior year result of US $59.0 million. Net income attributable to shareholders from continuing operations was US $32.5 million compared to the prior year result of US $28.5 million. Net income to shareholders from continuing operations in 2018 included the impact of a provision on the Government of Barbados Debt and was partially offset by certain one-time positive earnings releases.
Total revenue for the Group amounted to US $1,399.0 million, against a prior year amount of US $1,063.4 million, an increase of US $335.6 million or 32%. Revenue growth was driven primarily by the USA business segment which generated premium growth, amplified by our strategic decision to cease reinsuring its premiums to third parties. Revenues continue to grow year over year in the Sagicor Jamaica and Sagicor Life business segments as well.
Benefits including change in actuarial liabilities for future benefits were US $888.0 million, compared to US $537.4 million for the previous year and was consistent with the growth in premium income. Expenses including credit impairment losses were US $393.8 million, compared to US $443.0 million for the same period in the prior year, a decrease of 11%.
Expenses in the prior year included credit impairment losses of US $96.0 million, largely related to the impairment of the Government of Barbados debt. Current year expenses include the impact of higher commissions related to sales growth in the USA segment.
Our operating segments continued to perform well. The Sagicor Life segment reflected robust organic growth, with net income amplified by comparison to Q3 2018 which included certain debt restructuring provisions on GoB debt. Sagicor Jamaica reflected continued robust growth and profitability across the segment. Sagicor Life USA segment reflected slowing growth in net premiums, as the segment scaled back new business production in the quarter, in response to relative net interest margins. Net income in the Sagicor Life USA segment declined relative to a prior year comparable quarter that included certain positive provisions.
Group comprehensive income was US $115.9 million, compared to a loss of US $6.6 million for the prior year. Shareholder comprehensive income from continuing operations was US $62.4 million, compared to a loss of US $10.0 million for the prior year. The Group continues to benefit from significant net gains on investments measured at Fair Value through Other Comprehensive Income. Losses incurred on the retranslation of foreign currency operations reduced this year when compared to the previous year.
Results for the third quarter of 2019 reflected moderate aggregate growth in our core operating segments, offset by losses in non-core segments. Group net income from continuing operations closed the three-month period to September 30, 2019 at US $21.1 million compared to US $19.6 million for the same period in 2018; an increase of US $1.5 million (7.7%). Net income to shareholders from continuing operations was
US $6.3 million compared to US $7.0 million in Q3 2018. During Q3 2019, Sagicor took a provision of $2.5 million, representing our maximum potential impact from Hurricane Dorian. During Q3 2018, the Group increased its provisions on the Government of Barbados (GoB) debt; net impact on the net income was US $16.4 million. Net income from continuing operations in 2018, also benefitted from certain one-time positive earnings releases that did not recur in 2019.
In the statement of financial position as at September 30, 2019, assets amounted to US $8.1 billion, and liabilities amounted to US $6.8 billion. Group equity was US $1,248.8 million, compared to US $1,135.5 million at December 31, 2018. Shareholders' equity was US $660.4 million, compared to US $600.9 million at December 31, 2018. The Group's debt was US $512.4 million with a debt to capital ratio of 29.1%, compared to 30.2% at December 31, 2018.
On June 4, our shareholders overwhelmingly approved the previously announced transaction with Alignvest Acquisition II Corporation ("AQY"), with 99.5% of shares voting in favour of the transaction. Our shareholders showed further support by electing to receive an aggregate of approximately US $20 million in cash consideration out of the maximum available US $205 million we offered to them. As a result, the vast majority of Sagicor's shareholders will continue to retain their investment in Sagicor post the transaction.
Following completion of the Transaction, which is expected to close in the fourth quarter of 2019 subject to customary regulatory approvals, it is expected that Sagicor will retain over US $420 million of net cash from the transaction, leaving our company exceptionally well capitalized for future growth.
Effective 30 September 2019, the group acquired 60% of the share capital of Advantage General Insurance Company Limited domiciled in Jamaica for a purchase consideration of US $31.4 million. The acquired business had no impact on the results for the nine months ended September 2019.
On October 18, 2019 the Government of Barbados (GOB) announced agreement in principle with the External Creditor Committee for the restructuring of its US dollar denominated commercial debt. In consideration of the recently released terms for the restructure of the US dollar denominated commercial debt, management believes that it has fully provided for this exposure.
Sagicor had announced its intention in November 2018 to acquire Scotia Jamaica Life Insurance Company Limited ("Scotiabank Insurance Jamaica") and ScotiaLife Trinidad and Tobago Limited ("Scotiabank Insurance Trinidad and Tobago"). Sagicor and The Bank of Nova Scotia Jamaica Limited have mutually agreed not to proceed with the 20-year distribution agreement for insurance products and solutions in Jamaica. As a result, Sagicor will not proceed with the acquisition of Scotiabank Insurance Jamaica at this time. Sagicor, Alignvest Acquisition II Corporation and Scotiabank Trinidad and Tobago Limited remain parties to a share purchase agreement dated November 27, 2018 (the "Trinidad SPA") pursuant to which Sagicor agreed to establish a 20-year distribution agreement for insurance products and solutions in Trinidad and Tobago, and acquire all of the issued and outstanding shares in the capital of Scotiabank Insurance Trinidad and Tobago, subject to the satisfaction of certain conditions precedent. Sagicor continues to pursue the transactions contemplated in the Trinidad SPA.
On behalf of the Board of Sagicor, I wish to thank our Shareholders and Customers for their continued support.
Stephen McNamara
Chairman
November 12, 2019
Financial Highlights
Nine months ended SEPTEMBER FINANCIAL HIGHLIGHTS 30 (in US Currency except percentages) 2019 2018 ------------------------------------------- -------------- -------------- $1,399.0 $1,063.4 Total revenue m m Overall Group net income $79.5 m $59.0 m Overall shareholders' net income $33.0 m $31.7 m Net income allocated to non-controlling interests $47.3 m $35.0 m $1,248.8 Total equity m $895.9 m -------------- Book Value per share $2.16 $1.96 ------------------------------------------- -------------- -------------- Ratio of Debt to Capital 29.1% 31.1% ------------------------------------------- -------------- -------------- Earnings per common share 10.6c 9.3c Annualised return to common shareholders' equity 7.1% 6.4% ------------------------------------------- -------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts expressed September September December in US $000 30 30 31 2019 2018 2018 (unaudited) (unaudited) (audited) ------------------------ ------------- ------------- ----------- ASSETS Financial investments 6,052,166 5,077,123 5,347,663 Other investments and assets 2,004,278 1,730,970 1,960,522 Assets of discontinued operation 0 13,301 17,239 Total assets 8,056,444 6,821,394 7,325,424 ------------- LIABILITIES Policy liabilities 4,250,733 3,590,893 3,662,438 Other liabilities 2,556,905 2,334,648 2,527,525 Total liabilities 6,807,638 5,925,541 6,189,963 ------------- ------------- EQUITY Shareholders' equity 660,370 598,107 600,869 Participating accounts 3,423 (10,528) 4,078 Non-controlling interests 585,013 308,274 530,514 Total equity 1,248,806 895,853 1,135,461 ------------- Total liabilities and equity 8,056,444 6,821,394 7,325,424
------------------------- ------------- -------------
These financial statements have been approved for issue by the Board of Directors on November 12, 2019.
CONSOLIDATED STATEMENT OF INCOME
Amounts expressed ---- Nine months ---- Three months in US $000 to ---- to ---- ----- September ----- September 30 ----- 30 ----- 2019 2018 2019 2018 (unaudited) (unaudited) (unaudited) (unaudited) -------------------------------- ------------- ------------- ------------- REVENUE Net premium revenue 941,089 720,000 263,319 309,970 Net investment and other income 457,885 343,437 142,832 120,188 Total revenue 1,398,974 1,063,437 406,151 430,158 ------------- BENEFITS AND EXPENSES Benefits 887,995 537,381 248,295 238,965 Expenses 393,807 442,958 125,487 156,040 Total benefits and expenses 1,281,802 980,339 373,782 395,005 ------------- OTHER (Loss) / gain arising on business combinations, acquisitions and divestitures (478) 5,267 (131) (13) INCOME BEFORE TAXES 116,694 88,365 32,238 35,140 Income taxes (37,670) (32,591) (11,096) (15,396) NET INCOME FROM CONTINUING OPERATIONS 79,024 55,774 21,142 19,744 Net income from discontinued operation 517 3,191 0 (166) NET INCOME FOR THE PERIOD 79,541 58,965 21,142 19,578 ------------- NET INCOME / (LOSS) ATTRIBUTABLE TO: Common Shareholders From continuing operations 32,506 28,541 6,312 6,998 From discontinued operation 517 3,191 - (166) 33,023 31,732 6,312 6,832 Participating policyholders (804) (7,722) (1,509) 588 Non-controlling interests 47,322 34,955 16,339 12,158 79,541 58,965 21,142 19,578 ------------- Basic earnings per common share: From continuing 9.3 2.1 2.3 operations 10.6 cents cents cents cents From discontinued 1.0 0.0 (0.1) operation 0.2 cents cents cents cents 10.3 2.1 2.2 10.8 cents cents cents cents ------------- Fully diluted earnings per common share: From continuing 9.1 2.0 2.2 operations 10.3 cents cents cents cents From discontinued 1.0 0.0 (0.1) operation 0.2 cents cents cents cents 10.1 2.0 2.1 10.5 cents cents cents cents -------------------------------- -------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Amounts expressed ---- Nine months ---- Three months in US $000 to ---- to ---- ----- September ----- September 30 ----- 30 ----- 2019 2018 2019 2018 (unaudited) (unaudited) (unaudited) (unaudited) -------------------------------------- ------------- ------------- ------------- NET INCOME FOR THE PERIOD 79,541 58,965 21,142 19,578 ------------- ------------- ------------- Items net of tax that may be reclassified subsequently to income: Financial assets measured at fair value through other comprehensive income (FVOCI): Gains / (Losses) on revaluation 151,001 (57,623) 31,550 7,490 Gains transferred to income (6,683) (964) (5,578) 785 Net change in actuarial liabilities (84,294) 27,297 (20,188) (2,577) Retranslation of foreign currency operations (21,267) (34,946) (13,614) (17,164) 38,757 (66,236) (7,830) (11,466) Items net of tax that will not be reclassified subsequently to income: Unrealised (losses) / gains arising on revaluation of owner occupied property (2,423) 816 541 (16) Net gains / (losses) on equity securities designated at fair value through through other comprehensive income 18 (173) 0 (200) Gains / (losses) on defined benefit plans 13 0 13 2,500 OTHER COMPREHENSIVE INCOME / (LOSS) FROM CONTINUING OPERATIONS 36,365 (65,593) (7,276) (9,182) TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE PERIOD 115,906 (6,628) 13,866 10,396 ------------- ------------- ------------- TOTAL COMPREHENSIVE INCOME / (LOSS) ATTRIBUTABLE TO: Common Shareholders From continuing operations 62,429 (10,035) 4,976 2,941 From discontinued operation 517 3,191 - (166) 62,946 (6,844) 4,976 2,775 Participating policyholders (505) (8,307) (1,830) 754 Non-controlling interests 53,465 8,523 10,720 6,867 115,906 (6,628) 13,866 10,396 --------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Amounts Share Share Retained Participating Non-controlling expressed in US $000 (unaudited) Capital Premium Reserves Earnings Accounts Interest Total --------------------------- -------- -------- --------- --------- -------------- ---------------- ---------- Nine months to September 30, 2019: Balance, beginning of period 3,061 300,665 (76,995) 374,138 4,078 530,514 1,135,461 Total comprehensive income from continuing operations 0 0 29,913 32,516 (505) 53,465 115,389 Total comprehensive income from discontinued operation 0 0 0 517 0 0 517 Transactions with holders of equity instruments: Movements in treasury shares 3 194 0 0 0 0 197 Changes in reserve for equity compensation benefits 0 0 5,303 0 0 0 5,303 Acquisition / disposal of subsidiary and insurance business 0 0 0 0 0 14,911 14,911 Dividends declared 0 0 0 (7,658) 0 (11,915) (19,573) Transfers and other movements 0 0 502 (1,789) (150) (1,962) (3,399) Balance, end of period 3,064 300,859 (41,277) 397,724 3,423 585,013 1,248,806 ---------------------------- -------- --------- --------- -------------- ---------------- Nine months to September 30, 2018:
Balance, beginning of period 3,059 300,470 (47,482) 367,327 865 308,089 932,328 Prior period adjustment 0 0 94 1,124 0 3,677 4,895 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) 358,009 (2,065) 309,414 921,282 Total comprehensive income from continuing operations 0 0 (38,576) 28,541 (8,307) 8,523 (9,819) Total comprehensive income from discontinued operation 0 0 0 3,191 0 0 3,191 Transactions with holders of equity instruments: Movements in treasury shares 0 1 0 0 0 0 1 Changes in reserve for equity compensation benefits 0 0 (750) 0 0 0 (750) Disposal of interest in subsidiaries 0 0 (935) 935 0 (2,221) (2,221) Dividends declared 0 0 0 (7,648) 0 (10,237) (17,885) Transfers and other movements 0 0 (45) (540) (156) 2,795 2,054 -------- -------- --------- --------- -------------- ---------------- Balance, end of period 3,059 300,471 (87,911) 382,488 (10,528) 308,274 895,853 ---------------------------- -------- -------- --------- --------- -------------- ----------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Amounts ---- Nine months expressed to ---- in US $000 ----- September 30 ----- 2019 2018 (unaudited) (unaudited) ------------- CASH FLOWS Operating activities: Cash from income, interest and taxation 419,609 234,171 Net increase in investments and operating assets (465,327) (304,492) Net change in operating liabilities 61,181 156,746 15,463 86,425 Investing activities (38,860) (27,077) Financing activities 5,282 (22,059) Effects of exchange rate changes (7,411) (8,490) Net change in cash and cash equivalents - continuing operations (25,526) 28,799 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 313,791 367,148 -------------------------------------------
STATEMENT OF INCOME BY SEGMENT
Amounts expressed in US $000 Nine months to September 30, 2019 (unaudited) Sagicor Sagicor Sagicor Life Head Office Inter-segment Life Jamaica USA and other eliminations Total --------------------- --------------------- --------------------- --------------------- ------------------- Total revenue 372,931 542,760 458,476 64,537 (39,730) 1,398,974 Total benefits and expenses 335,659 426,656 434,523 73,246 11,718 1,281,802 Loss arising on business combinations, acquisitions and divestitures (478) - - - - (478) INCOME BEFORE TAXES 36,794 116,104 23,953 (8,709) (51,448) 116,694 Income taxes (6,098) (24,899) (5,030) (1,698) 55 (37,670) NET INCOME / (LOSS) FROM CONTINUING OPERATIONS 30,696 91,205 18,923 (10,407) (51,393) 79,024 Net income / (loss) attributable to shareholders from continuing operations 31,500 43,153 18,923 (35,465) (25,605) 32,506 --------------------- --------------------- --------------------- --------------------- ------------------- Total Comprehensive income / (loss) attributable to shareholders from continuing operations 40,454 49,443 31,549 (33,804) (25,213) 62,429 --------------- --------------------- --------------------- --------------------- --------------------- ------------------- Nine months to September 30, 2018 Sagicor Sagicor Sagicor Life Head Office Inter-segment Life Jamaica USA and other eliminations Total --------------------- --------------------- --------------------- --------------------- ------------------- NET INCOME / (LOSS) FROM CONTINUING OPERATIONS 26,395 70,922 11,699 11,245 (64,487) 55,774 --------------------- --------------------- --------------------- --------------------- ------------------- Net income / (loss) attributable to shareholders from continuing operations 34,117 34,833 11,699 (12,925) (39,183) 28,541 --------------------- --------------------- --------------------- --------------------- ------------------- Total Comprehensive income / (loss) attributable to shareholders from continuing operations 29,990 8,564 2,745 (13,640) (37,694) (10,035) --------------- --------------------- --------------------- --------------------- --------------------- -------------------
STATEMENT OF FINANCIAL POSITION BY SEGMENT
Amounts expressed in US $000 September 30, 2019 (unaudited) Sagicor Head Sagicor Sagicor Life Office Inter-segment Life Jamaica USA and other eliminations Total ---------------- ---------------- ----------------- --------------------- ---------------- Total assets 2,041,470 3,412,182 2,733,751 390,902 (521,861) 8,056,444 Total liabilities 1,525,378 2,501,461 2,454,840 847,820 (521,861) 6,807,638 Net assets 516,092 910,721 278,911 (456,918) - 1,248,806 --------------- September 30, 2018 ---------------------------------------------------------------------------------------------------------------- Sagicor Head Sagicor Sagicor Life Office Inter-segment Life Jamaica USA and other eliminations Total ---------------- ---------------- ----------------- --------------------- ---------------- Net assets 527,170 563,609 241,760 (436,686) - 895,853 --------------- ---------------- ---------------- ----------------- --------------------- ----------------
PRODUCTS AND SERVICES
Total external revenues relating to the Group's products and services are summarised as follows:
Amounts expressed ---- Nine months to in US $000 ---- ----- September 30 ----- 2019 2018 (unaudited) (unaudited) ----------------- Life, health and annuity insurance contracts issued to individuals 924,978 669,307 Life, health and annuity insurance and pension administration contracts issued to groups 238,819 210,171 Property and casualty insurance 38,283 34,706 Banking, investment management and other financial services 134,756 127,162 Other revenues 62,138 22,091 1,398,974 1,063,437 -----------------------------
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. IFRS 16 removes the distinction between operating and finance 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.
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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November 14, 2019 02:01 ET (07:01 GMT)
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