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The Sagicor Jamaica Building in New Kingston (File photo)

Sagicor Group Ja posts JM$13.74 billion profit for 2020

The Sagicor Jamaica Building in New Kingston (File photo)

Sagicor Group Jamaica ended the year 2020 with profits of JM$13.78 billion, down 12 per cent compared to the previous year. 

Consolidated net profit attributable to stockholders of JM$13.78 billion was generated from total revenues of JM$84.57 billion (inclusive of unrealised capital losses of JM$2.64 billion). 

Total revenue decreased by nine per cent or JM$8.03 billion, a decrease of six per cent (JM$5.39 billion) when adjusted for unrealised capital losses.

Losses from global travel downturn

Sagicor Group said that travel-related revenue continues to be impacted by the significant fall-off in tourism, resulting in declines in the valuations of holdings in this segment. 

Jewel Runaway Bay, Jamaica. (Photo: Playa Resorts)

The group’s earnings per share reduced to JM$3.53, compared with JM$4.01 in the prior year. 

“The local markets have rebounded somewhat and the impact of this has been reduced on a year to date basis unrealized IFRS 9 Expected Credit Losses (ECL) on loan portfolios and investment securities,” directors stated in their comments on the years performance,

However, travel restrictions impacted on investments in hotel operations, which has led to the group assuming a significant share of loss and impairment charge from its investment in associate Playa Hotels and Resorts. In addition, the group accounted for an impairment charge relating to the goodwill that arose on the acquisition of the X-Fund Group in 2018.

Insurance portfolio

In the general group overview, directors said that the insurance segment performed remarkably amidst  the pandemic, with net premium  8 per cent ahead of 2019. 

Sagicor Life Jamaica Limited’s headquarters in New Kingston. (File photo)

The Individual Life segment closed the year with improved net profits of JM$7.95 billion compared to JM$5.37 billion in 2019. 

Net premium income of JM$28.23 billion was seven per cent higher than that of the comparative 2019 period. 

New policy sales in Jamaica and Cayman rose three per cent over 2019, resulting in a six per cent growth of the portfolio year-to-date to over 600,000 policies. 

Banking segments also suffer

The commercial and investment banking businesses should continue to improve as the economy shows greater activity, directors stated. 

Sagicor Bank contributed net profits of JM$2.46 billion for the year, a 19 per cent reduction when compared to 2019. 

Sagicor Bank Jamaica Limited headquarters in New Kingston, Jamaica (File photo)

The investment banking segment contributed JM$2.78 billion to the group, four per cent lower than prior year. 

Management said unrealised capital losses driven by the broad decline in bond and equity prices earlier in 2020 continued to impact on the segment’s Q4 results. 

Directors stated that despite these adverse effects of the Playa write-down and increased ECL, the performance was fair.

Stockholders’ equity of JM$106.38 billion as at December 2020 increased by 17 per cent or JM$15.13 billion over the prior year. 

Group cash and cash equivalents at the end of December 2020 was JM$37.24 billion (2019: JM$17.21 billion).