CABROKERS reports 18% increase in year end net profit

March 17, 2020

Caribbean Assurance Brokers (CABROKERS), for the year ended December 31, 2019, reported revenue of $401.48 million compared to the $385.46 million booked for the prior year, a 4% increase. For the quarter, revenue went up by 14% closing at $65.42 million (2018: $57.36 million). Other operating income totalled $33.75 million (2018: $41.01 million) for the year ended December 31, 2019. As such, total operating income amounted to $435.22 million (2018: $426.47 million) for the twelve months ended December 31, 2019. The Company noted, “ the reduction in other income was due mainly to the movement in the foreign exchange translation resulting from the devaluation of the US dollar.” Total operating income for the fourth quarter amounted to $68.01 million compared to $57.36 million recorded for the fourth quarter of 2018.

Total operating expenses totalled $381.06 million for the year ended December 31, 2019, representing a slight decrease of 0.08% on the $381.35 million recorded in the prior year due to, “cost containment measures,” as noted by CABROKERS. Of this, Administrative expenses amounted to $239.39 million, 7% higher when compared to the $222.77 million in 2018. Selling expenses recorded a decrease of 11% for the year, totalling $141.66 million (2018: $158.58 million). For the quarter, total operating expenses closed the period at $90.48 million (2018: $105.65 million) due to a 33% decline in selling expenses to $31.38 million (2018: $46.80 million).

Operating profit, therefore, amounted to $54.17 million for the year ended December 31, 2019 (2018: $45.11 million), this increase of 20% year over year was attributable to, “the growth in commission income and containment of costs,” as stated by the Company. However, for the fourth quarter ended December 31, 2019, CABROKERS booked an operating loss of $22.47 relative to a loss of $48.28 million for the same quarter in 2018.

Finance cost increased to total $7.87 million (2018: $2.05 million). CABROKERS stated that this increase in finance cost was mainly due to, “a mortgage loan from the Bank of Nova Scotia, interest on a shareholder’s loan, and interest on the use of asset for an operating lease.” While, for the quarter, finance cost closed at $2.58 million versus $507,526 in the previous comparable quarter.

Consequently, profit before taxation grew to $46.30 million compared to $43.06 million in 2018. After incurring tax charges of $7.66 million (2018: $10.24 million), net profit amounted to $38.63 million, an 18% growth when compared to $32.82 million in the prior corresponding period. For the quarter, the Company reported a net loss of $18.05 million relative to a net loss of $50.40 million in the fourth quarter of 2018.

Total comprehensive income amounted to $86.13 million compared to $33.75 million recorded in 2018. The Company highlighted that this increase in total comprehensive income was mainly due to an, “unrealized gain on revaluation of the Old Hope Road property purchased in January 2019” of $47.50 million for the year ended December 31, 2019.

Earnings per share (EPS) closed the period at $0.15 (2018: $0.13), while for the quarter, the loss per share (LPS) was $0.07 (2018: $0.19). The total number of shares used in the computation amounted to 262,500,000 units. Notably, CABROKERS closed the trading period on March 16, 2020 at a price of $1.99.

Balance Sheet Highlights:

As at December 31, 2019, the Company’s assets totalled $476.47 million (2018: $308.55 million), 54% more than its value as at December 31, 2018. This was due to largely to a 459% increase in ‘Property, plant and equipment’ which amounted to $234.13 million (2018: $41.92 million). Cash and cash balances also increased to close at $75.80 million (2018: $32.07 million).  However, this was partially tempered by a decline in ‘Receivables’ which closed at $138.10 million (2018: $217.95 million). Notably, the Management stated, “in January the Company acquired the building it now occupies and a right for two operating leases.”

Total Shareholders’ Equity totalled $212.03 million (2018: $129.39 million), which translated to a book value of $0.81 per share (2018: $0.49).

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