August 16, 2021
Sagicor Group Jamaica Limited (SJ), for the six months ended June 30, 2021, reported that Total Revenues increased by 24% to $48.20 billion from $38.85 billion in 2020, while for the second quarter, Total Revenues rose 14% to total $25.07 billion compared to $22.04 billion in 2020. Total revenue year to date was broken down as follows.
- Net premium revenue increased slightly by 1% to a total of $25.51 billion compared to $25.36 billion last year.
- Net Investment Income increased to $9.34 billion from $9.02 billion in 2020, a 3% increase. SJ noted this increase is as a result of the “price recovery in its marketable securities.”
- Realised and Unrealised capital (losses)/gains closed the period at a gain of $3.79 billion versus a loss of $2.39 billion in 2020.
- Credit losses on loans and investment securities amounted to $219.31 million relative to $1.63 billion in 2020. “Substantially lower ECLs were in part due to recoveries of outstanding loans and credit card accruals in the Commercial Banking segment,” as per SJ.
- Fees and other revenue went up 14% to $7.91 billion from $6.97 billion in 2020, “as the Group benefited from increases in managed fund values as well as realised and unrealised foreign currency gains,” noted SJ.
- Hotel revenue closed the period at $1.87 billion relative to $1.49 billion in 2020.
SJ noted, “prior year’s revenues were adversely impacted by COVID-19, characterized by large unrealised fair value losses and high Expected Credit Losses (ECL); a direct result of the slowdown influenced by the pandemic. The current period has seen some reversal of these factors resulting in improved revenues but benefits and expenses, outcomes of higher policyholder claims and increases in actuarial reserves, have negatively impacted profitability.”
Benefits and Expenses totaled $41.19 billion for the period, increasing by 33% from $31.01 billion, while for the second quarter Benefits and Expenses were up 22% to close at $22.11 billion relative to $18.09 billion in 2020. Of this Benefits and Expenses:
- Net insurance benefits incurred increased by 4% to close at $16.57 billion (2020: $16.01 billion).
- Changes in insurance and annuity liabilities amounted to a loss of $5.95 billion relative to a gain of $2.21 billion in 2020.
- Administration Expenses increased from $10.56 billion in 2020 to $11.52 billion in 2021.
- Commission and related expenses grew by 11% to $3.57 billion from $3.21 billion in 2020.
- Depreciation and Amortization amounted to $1.34 billion (2020: $1.49 billion).
- Other taxes and levies totaled $820.61 million versus $746.74 million in 2020.
SJ stated, “Rising medical costs in our Employee Benefits Division (EBD) and increases in death claims contributed to an increase of 4% in net benefits, a direct result of the pandemic’s effect on health security.”
Share of profit from joint venture amounted to $496.19 million relative to a gain of $148.51 million a year prior. Share of loss from associate for the prior period totaled $1.93 billion, however, nil for the period under review. Impairment of investment in associate amounted to $1.79 billion as at June 2020, but was nil as at June 2021. Impairment of goodwill totaled $853.50 million as of June 2020 but was nil as at June 2021. Share of loss from disposal of associate amounted to $233.09 million (2020: $380.75 million).
As such, Profit before Taxation amounted to $7.27 billion, a 139% increase when compared to the $3.05 billion booked in 2020. While for the quarter, pre-tax profit amounted to $3.23 billion (2020: $721.97 million).
Investment and corporation taxes of $1.98 billion (2020: $2.17 billion) was reported for the period, a decrease of 9% which translated into a 504% increase in net profit to $5.29 billion (2020: $876.90 million) for the six months period. In addition, net profit for the quarter amounted to $2.39 million relative to a loss of $265.15 million in 2020.
Net profit attributable to shareholders for the period amounted to $4.85 billion relative to $4.36 billion for the corresponding period in 2020. Total comprehensive income amounted to $2.14 billion (2020: $2.08 billion) for the six months ended June 30, 2021. For the second quarter, total comprehensive income amounted to $3.98 billion (2020: $6.56 billion).
Earnings per share (EPS) for the quarter amounted to $0.50 (2020: $0.63), while EPS for the period totaled $1.24 relative $1.12 in 2020. The twelve-month trailing EPS amounted to $3.65. The number of shares used in our calculations amounted to 3,905,634,918 units. SJ’s stock last traded on August 16, 2021, at $57.69 with a corresponding P/E of 15.79 times.
SJ noted, “Sagicor Group Jamaica remains committed to playing its part in Jamaica’s plans for recovery, recently partnering with the International Finance Corporation (IFC), a member of the World Bank Group, in providing working capital solutions for Small and Medium-sized Enterprises (SMEs) affected by the pandemic.”
Additionally, “Our Group has also partnered with the Private Sector Organization of Jamaica (PSOJ) to aid in the Private Sector Vaccine Initiative, which aims to provide easy access to the COVID-19 vaccine for employees across all business sectors.”
Balance Sheet at a glance:
Total Assets increased by 7% or $35.40 billion to close at $507.53 billion as at June 30, 2021 from $472.13 billion the year prior. This increase was mainly driven by ‘Financial investment’ which went up to $222.61 billion (2020: $187.54 billion).
Equity attributable to stockholders of the company as at June 30, 2021 stood at $106.75 billion (2020: $93.73 billion) resulting in book value per share of $27.33 (2020: $24).
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