SJ’s reports a 35% increase in six months net profits

Market News

July 30, 2019

Date: July 30, 2019

Sagicor Group Jamaica Limited (SJ) for the six months ended June 30, 2019, Total Revenues increased by 33% to $42.59 billion from $32.02 billion in 2018, while for the second quarter Total Revenues improved 39% to total $22.47 billion compared to $16.20 billion in 2017. Total revenue year to date was broken down as follows;

- Net premium revenue increased by 14% to a total of $21.07 billion compared to $18.45 billion last year.
- Net Investment Income increased to $11.91 billion from $7.83 billion in 2018, a 52% increase.
- Fees and other revenue went up 19% to $6.81 billion from $5.74 billion in 2017.
- Hotel revenue close the period at $2.80 billion relative to nil in 2018.

Benefits and Expenses totaled $34.20 billion for the period, increasing by 33% from $25.63 billion, while for the second quarter Benefits and Expenses were up 36% to close at $17.75 billion relative to $13.09 billion in 2018. Of this Benefits and Expenses:

- Net insurance benefits incurred increased by 3% to close at $13.13 billion (2017: $12.70 billion).
- Changes in insurance and annuity liabilities rose by 793% to total $5.04 billion relative to $564.30 million in 2018.
- Administration Expenses increased from $8.77 billion in 2018 to $10.08 billion in 2018.
- Commission and related expenses grew by 10% to $2.87 billion from $2.62 billion.
- Amortization of intangible assets and Asset tax both advanced to $376.78 million ($342.92 million) and $641.61 million (2018: $637.69 million) respectively.

Share of loss from joint venture amounted to $12.09 million relative to a profit of $15.57 million a year prior. Share of profit from associate for the period totaled $909.81 million compared to $223.20 million last year. As such, Profit before Taxation amounted to $9.29 billion, a 40% increase when compared to the $6.63 billion booked in 2018.

Investment and corporation taxes of $2.16 billion was reported for the period, an increase of 60% which translated into a net profit of $7.13 billion (2016:$ 5.28 billion) for the six months period. In addition, profit for the quarter amounted to $3.63 billion relative to $2.64 billion in 2018. Net profit attributable to shareholders for the period amounted to $6.39 billion relative to $5.28 billion for the corresponding period in 2018.”

Earnings per share (EPS) for the quarter amounted to $0.945 (2018: $0.676), while EPS for the period totaled $1.64 relative $1.35 in 2018. The twelve month trailing EPS amounted to $3.93 The number of shares used in our calculations amounted to 3,905,634,918 units. SJ’s stock last traded on July 30, 2019 at $58.52.

Balance Sheet at a glance:

Total Assets increased by 14% or $51.55 billion to close at $424.98 billion as at June 30, 2019 from $373.43 billion the year prior. This increase was mainly driven by the increase by ‘Financial Investments’ which went up to $185.47 billion (2018:$158.94 billion). Also, ‘Investment in associated company’ increased 250% to end the period at $26.09 billion (2018: $7.46 billion).

Equity attributable to stockholders of the company as at June 30, 2019 stood at $82.80 billion (2018: $68.81 billion) resulting in book value per share of $28.54 (2018: $17.62).

Disclaimer:

Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.