SJ reports 10% increase year end net profit attributable to shareholders

March 20, 2020

Sagicor Group Jamaica (SJ), for the year ended December 31, 2019 reported a 31% increase in total revenues to $92.67 billion from $70.66 billion in 2018, while for the fourth quarter total revenues went up 31% to total $25.16 billion compared to $19.18 billion in 2018. Total revenue for the year end was broken down as follows:

  • Net premium revenue increased by 17% to a total of $46.51 billion compared to $39.81 billion last year.
  • Net investment income rose to $26.98 billion from $18.25 billion in 2018, a 48% increase.
  • Fees and other revenue increased 22% to $13.90 billion from $11.35 billion in 2018.
  • Hotel revenue increased by 323% to $5.27 billion from $1.25 billion in 2018.

Benefits and expenses totalled $71.87 billion for the period, a rise of 33% from $54.07 billion, while for the fourth quarter benefits and expenses were up 28% to close at $18.21 billion relative to $14.19 billion in 2018. Of this:

  •  Commission and related expenses increased by 5% to $6.09 billion from $5.78 billion in 2018.
  •  Administration expenses increased by 18% to $21.59 billion (2018: $18.32 billion).
  •  Changes in insurance and annuity liabilities moved from $2.25 billion in 2018 to $8.95 billion for the year ended December 31, 2019.
  •  Net insurance benefits incurred amounted to $29.11 billion versus $25.47 billion that was recorded last year.
  •  Other taxes and levies totalled $643.54 million, a 9% decrease relative to $638.05 million recorded in the prior year.
  •  Amortization of intangible assets rose 23% from $704.20 million in 2018 to $787 million in 2019.
  •  Hotel Expenses rose by 364% to $4.14 billion from $892.63 million recorded in 2018.
  •  Amortization of lease liabilities stood at $557.63 million for the period under review (2018: nil).

SJ noted that the increase in expenses was due to,“higher Actuarial Liabilities emanating mainly from growth of the inforce Insurance business and lower interest rates. Increased policy benefits, including death claims, health claims, annuity payments, surrenders and withdrawals from segregated policy funds, as portfolios grew. P&C claims for last quarter 2019 relating to AGI are also included in Net Benefits costs. Also consolidated administration expenses, including depreciation and amortization of software, of $22.63 billion was 20% higher than in 2018. Excluding the effect of acquisitions and consolidation of X-Fund, the increase was 12%. Despite this, we maintained the Group efficiency ratio of administration expenses to total revenue, a key measure of expense management, at 31% as it was in 2018.”

Share of profit from joint venture amounted to $14.62 million relative to a share of profit of $18 million booked a year earlier. Share of loss from associate for the period totalled $98.66 million compared to a loss of $80.54 million last year. The Company reported ‘Gain on step acquisition of Sagicor X Fund’ of $1.52 billion in 2018, compared to nil for the same period in 2019.

As such, Profit before Taxation amounted to $20.72 billion, a 15% increase when compared to the $18.05 billion booked in 2018.

Investment and corporation taxes of $5.25 billion was reported for the period (2018: $4.17 billion), as such net profit for the year totalled $15.46 billion (2018: $13.88 billion), an 11% increase. Profit for the quarter amounted to $4.16 billion relative to $5.06 billion in 2018, down 18% year over year.

Net profit attributable to shareholders for the period amounted to $15.65 billion relative to $14.23 billion the prior year’s period. For the quarter, net profit attributable to shareholders reduced 11% to $4.79 billion (2018: $5.41 billion). SJ noted that, “The Q4 2018 results included a significant “one-time” gain of $1.52 billion on consolidation of X-Fund. In addition, 2019 results include higher losses from Playa Hotel & Resorts (Playa), an associated company.”

Total comprehensive income for the period under review closed at $22.79 billion (2018: $9.46 billion). While, total comprehensive income for the fourth quarter closed at $3.46 billion (2018: $1.80 billion).

Earnings per share for the quarter amounted to $1.23 (2018: $1.39), while EPS for the period totalled $4.01 relative an EPS of $3.64 in 2018. The total number of shares used in the calculations amounted to 3,905,634,918 units. SJ’s stock last traded on March 19, 2020 at $49.22.

The Group mentioned that, “In addition to strong generic growth across our major business lines, we expanded our investment in Property and Casualty Insurance with the acquisition of a 60% interest in Advantage General Insurance company Limited (AGI). Our 2019 operations also include activities for a full year relating to the Sagicor X-Fund Group (“X-Fund”) of which we took effective control and consolidated into SGJ from the 4th quarter of 2018 and TravelCash Jamaica Limited (TravelCash) which was acquired effective December 1, 2018.”

Balance Sheet at a glance:

Total Assets increased by 17% or $65.87 billion to close at $460 billion as at December 31, 2019 from $394.13 billion the year prior. The movement was attributed to a $29.87 billion and 15.71 billion increase in ‘Financial investments’ and ‘Loans & Leases. ‘Financial investments’ and ‘Loans & leases, after allowance for credit losses’ closed at $188.71 billion (2018: $158.84 billion), $85 billion (2018: $69.28 billion) respectively. ‘Pledged assets’ also contributed to the increase in total assets with a $9.68 billion increase to close at $80.17 billion (2018: $70.49 billion), respectively.

Equity attributable to stockholders of the company as at December 31, 2019 stood at $ 91.25 billion (2018: $74.34 billion) resulting in book value per share of $23.36 (2018: $19.03).


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