Sagicor improves performance, but takes US$99m loss on GoB debt
In spite of significant one-time items, in particular the restructuring of the Government of Barbados debt, the Sagicor Group says it delivered a “strong operational performance” for financial year 2018, which ended on Dec. 31.
Total revenue increased 22% to almost US $1.5 Billion, compared to the prior year amount of just over US $1.2 Billion, an increase of US $266 million.
Each business segment grew their revenue, and each delivered positive net income, with the largest single source of revenue growth being increased premiums in the USA segment.
Sagicor Life, of which Barbados is a part, had total revenue of US$321 million and net income attributable to shareholders of US$34 million; Sagicor Jamaica had total revenue of US$310 million and net income of close to US $40 million and Sagicor Life USA had total revenue of US$390 million and net income of US$10 million.
Group net income was US $103.0 million, compared to US $116 million in the prior year. Net income attributable to shareholders was US $43.7 million, compared to US $72.4 million in the prior year, a reduction of US $28.7 million. Both Group net income and net income attributable to shareholders were affected by the GoB restructuring. Without the restructuring costs, net income attributable to shareholders would have been US $82.9 million, representing growth of 15%, said the chairman. A large portion of those one-time costs related to its ongoing transaction with Alignvest Acquisition II Corporation.
Group comprehensive income was US $39 million, compared to US $180 million for the prior year, a decrease of US $141.2 million, but that group comprehensive income in 2018 included the provision for GoB debt restructuring and management estimates that group comprehensive income would have been US $87.7 million without such restructuring.
Sagicor says it has fully provisioned for the exchange of GoB debt as agreed with the Government of Barbados for a total of US$99 million and took a charge, net of offsetting adjustments, of US $ 48.8 million attributable to shareholders.
You will recall that last November, Sagicor Group announced that it had agred to be acquired by Alignvest Acquisition II Corporation (Alignvest). Through this transaction, Sagicor will acquire a listing on the Toronto Stock Exchange.
Sagicor also announced then that Sagicor and Alignvest would acquire Scotiabank’s life insurance operations in Jamaica and in Trinidad & Tobago. The chairman said completion of the transaction with Alignvest is expected in the second half of 2019, subject shareholders’ approval and customary regulatory approvals.