Sagicor Financial Corporation, the corporate giant with its roots in Barbados, is selling its European business after a series of major losses worth millions of dollars.
The good news for shareholders of the finance company, which also has operations in the Caribbean and United States, is that it earned $148.2 million in profits for the financial year ended December 31, 2012.
News of these developments came today from Sagicor Chairman Stephen McNamara, as the company officially released its financial results for last year. The net income in 2012 is almost on par with 2011’s $151.4 million in profits, an outcome the official called “a modest reduction”.
“Net income from continuing operations attributable to shareholders improved to US $52.4 million from the corresponding amount of US$ 44.8 million for 2011. Earnings per common share from continuing operations totalled US16.8 cents and represents a return on common shareholders’ equity of 9.5 per cent. These results are very encouraging and provide shareholders with a reasonable level of return,” the Chairman reported.
But McNamara said there was no such good news to report from his organisation’s business in Europe and that last December the company’s board and management “made the determination that the Sagicor Europe operations, comprising our Sagicor at Lloyd’s insurance business, would be divested and the group would realise its value through a sale of the business”.
“The Sagicor Europe results have been classified as discontinued. These operations had another disappointing year, with the incidence of large losses and catastrophe loss movements being recorded, resulting in an operating loss of US $15.6 million,” he said.
“Though this is an improvement over the operating loss of US$43.2 million incurred in 2011, the result is still disappointing. After including taxation, finance, currency exchange and impairment charges, the net loss associated with this business totalled US$ 42.0 million (2011 – US $43.9 million). Sagicor is currently engaged in a sale process with prospective buyers and we anticipate a sale of the business in the very near future.”
McNamara said as Sagicor moved to complete the disposal of its Sagicor Europe operations, it’s top brass would “focus exclusively on maintaining the good results achieved for the continuing operations and enhancing them even through these challenging economic conditions”.
“Revenue from continuing operations totalled US$1,064.4 million and increased from the comparative amount of US$944.5 million for 2011. This growth of 13 per cent in revenue is attributable to increased net premiums of US$60.5 million, increased investment income of US$17.5 million and increased other revenue of US$42 million,” he noted.
“Other revenues in 2012 benefited from one-off items, notably a gain on the recapture of a previously reinsured block of policies. Total benefits incurred from continuing operations totalled US$639.4 million as compared to US$541.8 million in 2011. The increase in benefits arose from an increase of US$38.1 million in policy benefits and more significantly from an increase in future policy benefits of US $62 million.” (SC)