SJ reports 2% increase in first quarter net profits

Date: May 16, 2018

Sagicor Group Jamaica Limited (SJ), for the three months ended March 31, 2018, reported total revenues increased by 5% to $15.82 billion from $15.08 billion in 2017, and was broken down as follows:
Net investment income declined to $4.10 billion from $4.54 billion in 2017. SJ noted that this was due to the “fall in interest rates.”
Fees and other revenue increased 18% to $2.38 billion (2017: $2.01 billion). “Fee-based income grew mainly from the expansion of our payments channels.”
Net premium revenue increased by 10% to a total of $9.34 billion from $8.53 billion in 2017.

Benefits and expenses totaled $12.54 billion for the period, increasing year over year by 2% from $12.31 billion. This increase was mainly driven by;

A 14% increase in net insurance benefits incurred to $6.19 billion (2017: $5.45 billion).
Administration expenses for the period amounted to $4.34 billion compared to $4.58 billion in the prior year, a 5% decrease.
Commission and related expenses fell by 2% to close at $1.26 billion down from the $1.28 billion posted in 2017.
Amortization of intangible assets amounted to $170.55 million (2017: $161.10 million), a 6% increase.
Asset tax moved up by 4% to close at $637.80 million in 2018 from $614.57 million in 2017.

Share of profit from joint venture amounted to $770,000 relative to $8.78 million the prior year. While share of profit from associates totaled $141.85 million relative to $158.13 million last year.

Profit before taxation amounted to $3.43 billion, a 17% gain when compared to the $2.92 billion booked in 2017.

After investment and corporation taxes of $786.46 million (2016: $326.51 million), net profit attributable to shareholders amounted to $2.64 billion (2017: $2.59 billion), an increase of 2%.

As a result, EPS for the quarter amounted to $0.68 (2017:$0.66) while the twelve-month trailing EPS totaled $ 3.10.

Balance Sheet at a glance:

Total assets increased by 5% or $16.53 billion to close at $355.25 billion as at March 31, 2018, from $338.72 billion the year prior. The main contributors to the increase in total assets were ‘Loans & leases, after allowance for credit losses’ amounting to $88.44 million (2017: $71.38 million), a 24% increase year over year and ‘Cash resources’ which closed at $22.71 billion compared $14.74 billion the previous year.

SJ noted, “Adoption of IFRS 9 during the quarter, led to Expected Credit Losses (ECL) of $530 million being recorded on debt securities classified as Amortized Cost and this reduced asset values.”

Equity attributable to stockholders of the company as at March 31, 2018, stood at $66.78 billion (2017: $59.40 billion) resulting in book value per share of $17.10 (2017: $15.21). The number of shares used in our calculations amounted to 3,905,634,918 units. SJ’s stock price closed on May 15, 2018, at $38.27.


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