The 2013 financial year got off to a reasonably good start for the Sagicor Group despite the impact of a one-time capital loss in Jamaica resulting from the country’s National Debt Exchange (NDX).
Financial results for the quarter ended March 31 show that net income from continuing operations amounted to US$14.3 million (BDS$28.6 million), a modest reduction from the US$16.5 million (BDS$33 million) achieved for the comparative period in 2012.
Chairman Stephen McNamara said the result was achieved after accounting for the US$11.8 million (BDS$23.6 million) impact of the NDX.
Net income from continuing operations attributable to shareholders increased to US$11.5 million (BDS$23 million) from the corresponding amount of US$9 million (BDS$18 million) in 2012.
Earnings per common share from continuing operations were 3.6 US cents (BDS 7.2 cents) and represented an annualized return on common shareholders’ equity of 8.3 per cent.
McNamara said operations in the Caribbean and the United States provided “strong” results.
However, he pointed out that in Jamaica the group exchanged over US$600 million (BDS$1.2 billion) of Government of Jamaica debt securities for new debt securities with lower market values, lower coupon rates and extended maturities.
“This exchange resulted in a one-time capitalized investment loss of US$11.8 million for the group and US$5.7 million to shareholders.
“This resulted in a reduced contribution to group net income from the Sagicor Jamaica operating segment,” he said.
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 from 2012’s total.
Net investment income and other income declined by US$7.6 million and reflected the capital loss on the Jamaican debt securities.
McNamara noted that 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 million for the current period.
The discontinued operations of Sagicor Europe incurred an overall loss of US$6.2 million attributable mainly to reductions in premium revenue and to finance costs. (NB)