CABROKERS reports nine months net loss of $23.39 million

November 10, 2020

Caribbean Assurance Brokers (CABROKERS), for the nine months ended September 30, 2020, reported revenue of $213.67 million compared to the $336.06 million booked for the prior year, a 36% decrease. For the quarter, revenue went down by 61% closing at $74.06 million (2019: $188.06 million). The decline in revenue, “resulted from the reduction in commissions earned from the four divisions. Individual life & Int’l Insurance Divisions had reductions of J$8.7 million & J$102.6 million respectively while the General Insurance &Employee Benefits Divisions had reductions below 10%,” as per Management.

Other operating income totalled $19.27 million (2019: $31.15 million) for the nine months ended September 30, 2020. As such, total operating income amounted to $232.94 million (2019: $367.21 million) for the nine months ended September 30, 2020. The Company noted that the decline in other operating income was “mainly as a result of reduction in service charge. The reduction in our income for the quarter was attributed to our International Health Comprehensive Insurance (ICHIP) 2019/2020 policy year being extended by an additional 3 months to November of this year, which would normally have been due to be renewed in August 2020.” Total operating income for the third quarter amounted to $78.78 million compared to $199.64 million recorded for the third quarter of 2019.

Total operating expenses totalled $249.22 million for the nine months ended September 30, 2020, representing a decrease of 14% from the $290.57 million recorded in the prior year due to, “reduced commission expenses and advertising expenses along with administrative expenses being curtailed,” as noted by CABROKERS. Of this, Administrative expenses amounted to $166.86 million, 7% lower when compared to the $180.29 million in 2019. Selling expenses recorded a 25% decrease for the nine months totalling $82.36 million (2019: $120.45million). For the quarter, total operating expenses closed the period at $86.43 million (2019: $120.45 million).

Operating loss, therefore, amounted to $16.29 million for the nine months ended September 30, 2020 relative to an operating profit of $76.64 million for the same period in 2019. For the third quarter ended September 30, 2020, CABROKERS booked an operating loss of $7.64 million relative to a profit of $79.18million for the same quarter in 2019.

Finance cost amounted to $3.97 million (2019: $5.29 million). While, for the quarter, finance cost closed at $1.26 million versus $2.08 million in the previous comparable quarter in 2019.

Consequently, loss before taxation amounted to $20.26 million compared to a pretax profit of $71.35 million in 2019. After incurring tax charges of $3.13 million (2019: $14.66 million), net loss amounted to $23.39 million compared to a net profit of $56.69 million booked in the prior corresponding period. For the quarter, the Company reported a net loss of $9.94 million relative to a net profit of $62.44 million in the third quarter of 2019.

Total comprehensive loss amounted to $23.39 million compared to an income of $104.18 million recorded in 2019. While for the quarter, total comprehensive loss was $9.94 million relative to income of $109.94 million in 2019.

Loss per share (LPS) closed the period at $0.09 (2019 EPS: $0.22), while for the quarter, the loss per share (LPS) was $0.04 (2019 EPS: $0.24). The twelve months trailing LPS amounted to $0.16. The total number of shares used in the computation amounted to 262,500,000 units. Notably, CABROKERS closed the trading period on November 10, 2020 at a price of $1.83.

Balance Sheet Highlights:

As at September 30, 2020, the Company’s assets totalled $706.41 million (2019: $639.18 million), 11% more than its value as at September 30, 2019. This was due to largely to increases in ‘Cash and cash balances’ and ‘Receivables’ which amounted to $289.23 million (2019: $265.96 million) and $154.21 million (2019: $122.63 million). Notably, the Management stated, “this was attributable to (1) increase in property plant and equipment due to assets purchased during the year; (2) right of use asset for an operating lease and increase in receivables; and (3) increased cash and bank balance due to premium collections at the end of the period.”

Total Shareholders’ Equity totalled $277.46 million (2019: $230.08 million), which translated to a book value of $1.06 per share (2019: $0.88).


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