November 8, 2021
Guardian Holding Limited (GHL), for the nine months ended September 30, 2021 reported gross premium written of TT$5.37 billion, 8% higher than the TT$4.99 billion reported for 2020. As a result, net written premium increased by 4% to TT$3.39 billion from TT$3.27 billion for the nine months ended September 30, 2020.
The Company noted that, “As with the prior two quarters in 2021, integration of the life insurance and annuities portfolio acquired by Guardian Life Limited at the end of 03 2020 from NCB Insurance Company Limited has contributed to the increase in this segment’s results for the year to date.” For the quarter ended September 30, 2021, gross written premium amounted to TT$1.64 billion (2020: TT$1.47 billion) and net written premium totalled TT$1.14 billion (2020: TT$1.05 billion).
Net results from insurance activities for the nine months fell 37%, year over year, from TT$998.20 million in 2020 to TT$630.44 million in 2021, whereas for the quarter, net results from insurance activities amounted to TT$213.43 million (2020: TT$447.25 million). Management stated that, “Much of this reduction is related to the temporary effects of the COVID-19 pandemic. Our life insurance operations in Jamaica have been experiencing an increase in mortality claims on account of the low COVID-19 vaccination rate of the population. Our life insurance operations in Trinidad & Tobago are experiencing persistency challenges on account of depressed economic activity triggered by COVID-19 related lockdowns.”
Net income from investing activities increased to TT$1.15 billion in 2021 from TT$580.75 million in 2020, a 98% increase. For the quarter, net income from investing activities rose 44% to TT$382.67 million (2020: TT$265.12 million).
GHL noted that, “This increase was primarily on account of net fair value gains which recorded a favourable movement of $491 million, from a loss of $358 million in the prior period to a gain of $133 million in this period, driven by net positive movements in the Group’s regional equity portfolios. Your Group continues to closely monitor the investment markets and rebalance portfolios as necessary .”
Fee and commission income from brokerage activities for the nine months rose 2% to TT$109.42 million (2020: TT$106.83 million). Whereas for the quarter, fee and commission income from brokerage activities rose 10% to TT$37.44 million (TT$34.09 million).
Net income from all activities for the nine months rose 12% to TT$1.89 billion (2020: TT$1.69 billion). Net impairment losses on financial assets the period under review was TT$76.47 million in 2021 relative to a loss of TT$24.79 million in 2020.
Operating expenses for the nine months ended September 30, 2020 rose 16% to close at TT$1.07 billion relative to TT$922.76 million in 2020. Whereas, operating expenses for the third quarter closed at TT$305.12 million relative to TT$304.28 million in 2020. Management also stated that, “The Group continues to closely monitor expenses as it continues to incur costs associated with the implementation of IFRS 17 (Insurance Contracts) as well as with our Group wide transformation initiatives.”
The Company also booked finance charges of TT$149.97 million for the nine months (2020: TT$110.01 million).
Operating profit for the nine months ended September 30, 2021 amounted to TT$592.28 million relative to an operating profit of TT$628.22 million booked for the comparable period last year. Operating profit for the third quarter ended September 30, 2021 amounted to TT$263.75 million relative to an operating profit of TT$404.78 million, a 35% decrease.
Share of after tax profits of associated companies amounted to TT$16.56 million (2020: TT$18.95 million).
Profit before taxation amounted to TT$608.84 million relative to a profit of TT$647.16 million in 2020. For the quarter, profit before taxation totalled TT$271.30 million (2020: TT$413 million).
Following taxes of TT$136.32 million in 2021 (2020: TT$170.99 million), net profit after tax totalled TT$472.52 million for the nine months ended September 30, 2021, compared to a net profit of TT$476.17 million reported last year. For the third quarter, net profit after taxation amounted to TT$212.23 million (2020: TT$322.62 million).
Deficit attributable to participating policyholders was TT$12.31 million relative to a surplus of TT$13.88 million in 2020. Therefore, profit for the period amounted to TT$460.21 million relative to a net profit of TT$490.05 million in 2020 and for the quarter, profit amounted to was TT$202.41 million (2020: TT$322.64 million).
The Group noted that, “this performance comes in the face of the quarter being marred by a US$10 million loss in Guardian Re, our Bermuda based reinsurance company. Guardian Re pools the Group’s hurricane and earthquake risk and reinsures the bulk of the aggregate to external, professional reinsurance companies. As a corollary to this activity, Guardian Re also accepts inward reinsurance from external reinsurance companies. The risks accepted are a diversified pool of global risks. It is unfortunate that from within this diversified pool a loss of US$10 million emerged relating to the German floods that have received widespread news coverage. The performance in the face of this event is testimony to the diversification of the Group’s profit streams by line of business and geography, reflecting our deliberate strategy to create a Group able to produce steady profits allowing for the natural volatility of insurance business.”
Net profit attributable to shareholders amounted to TT$457.08 million relative to a profit attributable to shareholders of TT$485.23 million in 2020. For the quarter, net profit attributable to shareholders was TT$200.94 million (2020: TT$320.63 million).
Total comprehensive profit amounted to TT$244.31 million (2020: TT$384.73 million) for the nine months ended September 30, 2021. For the quarter, total comprehensive profit amounted to TT$268.12 million (2020: TT$339.35 million)
As such, earning per share for the period amounted to J$42.96 (TT$1.97) relative to an EPS of J$43.96 (TT$2.09) in 2020. EPS for the third quarter amounted to J$19.00 (TT$0.90) relative to an EPS of J$29.00 (TT$1.40) in 2020. The trailing twelve months EPS amounted to J$70.15 (TT$3.22). The stock traded at J$563.08 as at November 5, 2021 with a corresponding P/E ratio of 8.03 times. The number of shares used in our calculations amounted to 232,024,923 units.
Balance Sheet at a Glance:-
Total assets amounted to TT$34.43 billion as at September 30, 2021. ‘Investment securities’ and ‘cash and cash equivalent’ contributed the most the assets base amounting to TT$21.57 billion and TT$3.37 billion, respectively.
Shareholder’s equity as at September 30, 2021 stood at TT$4.87 billion resulting in book value per share of TT$20.99 (J$457.74).
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