President and CEO of Sagicor Group, Christopher Zacca, indicates that the highlight of the group’s six-month results was the strong performance of its insurance business with net premium income being 20 per cent higher than in 2019.
Net premium income of J$25.36 billion for the segment increased 20 per cent for the six months to June, over 2019, an increase of 16 per cent when normalised for premiums from Advantage General Insurance Company (AGIC) which was acquired in September 2019.
The Group itself generated net profit attributable to stockholders of J$2.47 billion for the quarter compared to $1.88 billion for the March quarter and J$3.69 billion for the quarter ended June 2019.
For the six-month period, net profit was J$4.36 billion showing a 32 per cent decline compared to prior year.
Total revenue before unrealised capital losses increased by three per cent or J$1.25 billion.
“Hotel revenue has been deeply impacted since the worldwide collapse of the Tourism market, resulting in declines in the valuations of our Hotel businesses.”Sagicor Group President and CEO, Chris Zacca
Zacca said hotel revenue has been deeply impacted since the worldwide collapse of the tourism market, resulting in declines in the valuations of the group’s hotel businesses.
The Group’s earnings per share was reduced to J$1.12 from J$1.64 in the prior year.
The results were affected by credit losses (expected credit losses, IFRS) on loan portfolios and investment securities.
Additionally, COVID-19 and the resulting travel restrictions have adversely impacted investments in hotel operations, Zacca stated.
The Group recognised significant share of loss and impairment charge from its investment in associate (Playa) and an impairment charge relating to the Goodwill that arose on the acquisition of the X-Fund Group in 2018.
Zacca noted, “Hotel revenue has been deeply impacted since the worldwide collapse of the Tourism market, resulting in declines in the valuations of our Hotel businesses.”
The company head said that despite these adverse effects, the operating cash flow of the company has increased by $2.48 billion and “the Group continues to maintain strong liquidity by improving its cash position by J$6.63 billion.”
Stockholders’ equity of J$93.73 billion as at June 2020 increased by 13% or $10.93 billion over the prior year.
Commercial banking arm Sagicor Bank contributed net profit of J$0.72 billion for the current period, a 31 per cent reduction when compared to 2019.
Zacca said that the results were severely impacted by higher ECL on loans as a result of the impact of COVID-19 on Tourism, Entertainment and Energy sector loans and the slower than expected recovery of the economy.
Fee based income of J$1.94 billion was 3 per cent more than prior year despite being limited by payments channels and credit cards business slowing appreciably as a direct result of the decline in activity caused by COVID-19.
The Individual Life segment posted net profit of $1.91 billion, 11% lower than 2019. Net premium income of $13.66 billion was 7 per cent higher than the comparative 2019 period.
The Employee Benefits segment produced profit of $2.46 billion, 11% more than in 2019. New premium income grew 29%.
Sagicor Investments contributed J$1.29 billion (excluding the share of AGIC earnings) to the Group, 12 per cent higher than prior year. Fee income for the quarter was down compared to the similar period in prior year as less corporate financing deals were closed.