SJ reports 15% increase in year end net profits

Date: April 12, 2019

Sagicor Group Jamaica Limited (SJ), for the twelve months ended December 31, 2018 reported that total revenues increased by 1% to $70.66 billion from $69.73 billion in 2017 while for the fourth quarter revenues amounted to $19.18 billion (2017: $16.59 billion) a 16% uptick. Total revenue for the FY2018 was broken down as follows;
• Net premium revenue decreased by 3% to a total of $39.81 billion compared to $41.00 billion last year which, “benefitted from the large single premium annuity.”
• Net investment income decreased to $18.25 billion from $20.72 billion in 2017, a 12% drop.
• Fees and other revenue increased 42% to $11.35 billion from $8.02 billion in 2017.
• Hotel revenue amounted to $1.25 billion versus nil in last year.

Benefits and Expenses totaled $54.07 billion for the period, a decrease of 3% from $56.59 billion. The decline was mainly driven by decreases a decrease in ‘changes in insurance and annuity liabilities’ which closed at $2.23 billion (2017: $10.68 billion). ‘Net insurance benefits incurred’ increase by 16% to $25.47 billion from $21.91 billion. Administrative expenses increased to closed at $17.59 billion compared to $16.61 billion compared in 2017. Hotel expenses in 2018 amounted to $892.63 million (2017: nil), while commission and related expenses rose 18% to close at $5.78 billion versus $4.88 billion a year earlier. In addition, total benefits and expenses for the last quarter saw an 8% increase from $13.15 billion to $14.19 billion.

Share of profit from joint venture amounted to $18.01 million relative to a loss of $9.71 million a year earlier. Gain on step acquisition of X Fund Group totaled $1.52 billion (2017: nil), while share of loss from associate for the period totaled $80.54 million compared to a profit of $862.85 million in 2017.

Investment and corporation taxes increased to $4.17 billion for the period (2017: $2.92 billion). Consequently, net profit amounted to $13.88 billion relative to $12.07 billion in 2017. For the fourth quarter net profit closed at $5.06 billion (2017: $2.99 billion). Net profit attributable to shareholders amounted $14.23 billion (2017: $12.07 billion).

Earnings per share (EPS) for the year amounted to $3.64 (2017: $3.09), while for the quarter the EPS amounted to $1.30 (2017: 0.77) . The number of shares used in our calculation is 3,905,634,918. SJ’s last traded price as at April 11, 2018 was $ 37.63.

SJ highlighted, “During the year, we engaged in a significant transaction with the Playa Hotel Group (“Playa”) whereby we repositioned much of our investment in the Hospitality sector while simultaneously taking a significant equity stake in Playa. We also, separately, took effective control of the Sagicor X-Fund Group (“X-Fund”) and from the 4th quarter of 2018 are consolidating X-Fund’s operations, results and balance sheet in SGJ.”

Balance Sheet at a glance:

Total Assets increased by 12% or $41.63 billion to close at $394.13 billion as at December 31, 2018 from $352.04 billion the year prior. The movement was attributed to a $17.71 billion increase in ‘Investment in associated company’, which closed at $24.76 billion (2017: $7.05 billion). ‘Financial investments’ increased 12% to $158.84 billion (2017: $142.11 billion), while ‘Property, plant and equipment’ totaled $19.00 billion (2017: $5.06 billion). The company stated that, Assets grew by normal business growth, consolidation of X-Fund from October 1st, 2018, and the acquisition of Travel Cash Jamaica Limited (“Travel Cash”) from December 1, 2018.”

Equity attributable to stockholders of the company as at December 31, 2018 stood at $74.34 billion (2017: $68.50 billion) resulting in book value per share of $19.03 (2016: $17.54).

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