Highlights
- Total net revenue of
$516.3 million in Q2 increased 13% year over year - Net insurance premiums of
$364.9 million in Q2 increased 18% year over year - Net income to shareholders of
$9.3 million in Q2, excluding one-time costs related to bond refinancing, net income to shareholders would have been$14.9 million - Earnings per share of
US$0.064 orC$0.079 in Q2 - Total comprehensive income to shareholders was
$16.6 million in Q2 - Book value per share of
US$7.57 orC$9.33 in Q2 - Dividend of
US$0.05625 per common share to be paid during the third quarter (US$0.225 annualized dividend)
"Sagicor is pleased to announce another quarter of solid profitability and growth.
Consolidated Highlights
Profitability (US$ millions) | Q2 2021 | Q2 2020 | Change | YTD 2021 | YTD 2020 | Change |
Total net revenue | 516.3 | 458.5 | 13% | 947.7 | 801.7 | 18% |
Net income (loss) to shareholders | 9.3 | (0.3) | 3,200% | 40.8 | (29.6) | 238% |
Annualized return on shareholders' equity (%) | 3.4% | (0.1%) | 3.5 pts | 7.5% | (5.2%) | 12.7 pts |
Financial strength (US$ millions) | Q2 2021 | Q2 2020 | Change |
Shareholders' equity | 1,102 | 1,110 | (1%) |
Book value per share (US$ per share) | 7.57 | 7.21 | 5% |
MCCSR ratio (%) | 247% | 264% | (17 pts) |
Debt to capital ratio (%) | 31.3% | 23.9% | (7.4 pts) |
Total capital | 2,346 | 2,146 | 9% |
- Total net revenue including premiums of
$516.3 million increased 13% in the quarter compared to the same period in the prior year. Net insurance premium revenue increased by 18% Y/Y to$364.9 million . Reversals of credit impairment losses amounted to a$2.9 million gain during the quarter. - Net income to shareholders of
$9.3 million in the quarter was a significant improvement over the net loss of$0.3 million recorded in Q2 2020. The main positive contributing factor to the financial performance during the three-month period were strong sales and improved asset spreads in ourU.S. segment. Net income in this quarter was negatively affected by$5.6 million of one-time costs related to the early retirement of our bond due in 2022. - Total comprehensive income to shareholders was
$16.6 million with$7.2 million of other comprehensive income to shareholders. The other comprehensive income was primarily due to the marking to market of prices of bonds held at fair value through other comprehensive income. These gains were partly offset by a net change in actuarial liabilities reserve, and retranslation losses due to the devaluation of the Jamaican dollar. - Total capital of
$2,346 million increased 13% compared to the prior quarter due to an improvement in asset values. The Company's voluntarily adopted MCCSR ratio for its insurance businesses remained strong at 247% and the Company's debt to capital ratio was 31.3%, representing a short term increase of 9.1 percentage points Y/Y as the company held$188 million of excess debt it intended to retire subsequent to quarter end. Accounting for that debt repayment which was completed onAugust 11 , our debt to capital ratio would have been approximately 25%.
Dividends
On
Business Segment Performance
Sagicor considers its business within three main operating segments:
Performance (US$ millions) | Q2 2021 | Q2 2020 | Change | YTD 2021 | YTD 2020 | Change |
Total revenue | ||||||
| 122.4 | 97.2 | 26% | 252.6 | 210.4 | 20% |
Sagicor Jamaica | 176.5 | 166.9 | 6% | 341.8 | 299.3 | 14% |
| 206.4 | 179.8 | 15% | 317.2 | 270.7 | 17% |
Head office(1) | 11.0 | 14.5 | (24%) | 36.1 | 21.3 | 69% |
Benefits and expenses | ||||||
| (115.6) | (93.5) | (24%) | (236.3) | (203.4) | (16%) |
Sagicor Jamaica | (155.1) | (139.3) | (11%) | (292.3) | (243.7) | (20%) |
| (186.2) | (183.6) | (1%) | (295.6) | (292.5) | (1%) |
Head office(1) | (30.9) | (24.1) | (28%) | (55.8) | (56.9) | 2% |
Net income/(loss) to shareholders | ||||||
| 6.8 | 2.2 | 209% | 15.1 | 4.1 | 268% |
Sagicor Jamaica | 7.0 | 9.1 | (23%) | 16.9 | 18.2 | (7%) |
| 16.0 | (2.9) | 652% | 17.1 | (17.2) | 199% |
Head office(1) | (20.5) | (8.7) | (136%) | (8.3) | (34.7) | 76% |
(1) Head office, other, and adjustments Note: Values may not add due to rounding |
Business Segment - Quarterly Highlights
- Total net revenue including premiums of
$122.4 million increased 26% Y/Y. Net premium revenue of$89.3 million increased 18% Y/Y as the segment grew new business sales to individuals compared to the prior year which was impacted by the COVID-19 pandemic. Net investment income of$24.2 million was$5.4 million above the$18.8 million reported in the same quarter last year. - Net income to shareholders of
$6.8 million increased by 209% or$4.6 million Y/Y, as new business generation increased year over year, offset in part by higher lapses and surrenders due to continued slow economic activity in the southernCaribbean .
Sagicor Jamaica
- Total net revenue including premiums of
$176.5 million increased 6% Y/Y. Net premium revenue decreased slightly by 2% Y/Y to$87.0 million primarily due to the devaluation of the Jamaican dollar, offset by an increase in fees and other revenue which increased 48% or$10.7 million . - Net income to shareholders, after consideration of Sagicor's 49.1% ownership, decreased by 23% Y/Y to
$7.0 million , relative to a profit of$9.1 million in the same quarter in the prior year. The decrease in profitability was largely due to higher benefits in our insurance businesses from increases in death claims partly because of COVID-19, as well as higher health claims driven by medical cost inflation.
- Total net revenue including premiums increased 15% Y/Y to
$206.4 million . Net premium revenue closed the period at$179.2 million , up 32% Y/Y, as the segment increased sales of annuities as part of its stated strategy to scale the business. - Net income to shareholders was
$16.0 million compared to a loss of$2.9 million in the same quarter in the prior year driven by growth in new annuity business and improved asset spreads reflected in the actuarial liabilities due to asset allocation improvements.
Bond Refinance
On
Outlook for 2021
Sagicor's businesses continue to show their strength and resiliency in the face of continued economic uncertainty. While each of our businesses has remained profitable, our recovery of our growth and profit margins to target levels will be dependent on a return to normal economic activity. Sagicor will wait to reintroduce financial guidance until the timing of such recovery becomes clear.
Normal Course Issuer Bid
As announced in June, Sagicor received approval to renew its share buyback program that allows it to repurchase up to 9,131,133 of its common shares during the 12-month period commencing
Management's Discussion and Analysis and Consolidated Financial Statements (Unaudited)
This press release, which was approved by the Company's Board of Directors and Audit Committee, should be read in conjunction with the Company's unaudited financial statements and accompanying management's discussion and analysis ("MD&A"). The unaudited financial statements and MD&A are available on the Company's website at www.sagicor.com and will soon be filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
Conference Call
About
As a result of the transaction with
Non-IFRS Measures
The Company reports certain non-IFRS measures that are used to evaluate the performance of its businesses and the performance of their respective segments. As non-IFRS measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Securities regulators require such measures to be clearly defined and reconciled with their most comparable IFRS measure.
The Company references non-IFRS measures and insurance industry metrics in this document and elsewhere. Non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these are provided as additional information to complement those IFRS measures by providing further understanding of the results of the operations of the Company from management's perspective. Accordingly, these measures should not be considered in isolation, nor as a substitute for analysis of the Company's financial information reported under IFRS. Non-IFRS measures used to analyze the performance of the Company's businesses include but are not limited to: return on shareholders' equity, book value per share, MCCSR, debt to capital ratio, debt to equity ratio, and dividend pay-out ratio. Please see the "Non-IFRS Financial Information" section of the Management's Discussion and Analysis for a reconciliation of these non-IFRS measures.
Cautionary Statements
Certain information contained in this news release may be forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements are often, but not always identified by the use of words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "will", "may", "would" and "should" and similar expressions or words suggesting future outcomes. This news release includes forward-looking information and statements pertaining to the impact of the COVID-19 pandemic. These forward-looking statements reflect material factors and expectations and assumptions of Sagicor. Sagicor's estimates, beliefs and assumptions are inherently subject to uncertainties and contingencies regarding future events and as such, are subject to change. Risks and uncertainties not presently known to Sagicor or that it presently believes are not material could cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional information on these and other factors that could affect events and results are included in other documents and reports that will be filed by Sagicor with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Sagicor's expectations only as of the date of this document. Sagicor disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
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