Sagicor Reports $1.88 Billion In Profits For Q1 2020
Sagicor Group Jamaica President and CEO, Christopher Zacca, in an online press briefing on Monday May 18, reported that the Group generated net profit attributable to stockholders of $1.88 billion for the 1st quarter in 2020.
“In light of the global COVID-19 health crisis that has had significant impact on the world’s economy, Sagicor performed very well for the first quarter of 2020. I am extremely proud of the team for their tremendous performance in keeping our core businesses functional and vibrant while successfully navigating the sudden and significant changes to our operations due to the COVID-19 Pandemic,” Zacca said.
Zacca further noted that if the Group was to add back the impairments to tourism related investments and unrealized market losses on equities and unit trust investments, adjusted net profit for the quarter would have been $3.3 Billion, a 22% increase over Q1 2019. Additionally, total revenue before unrealized capital losses increased by 15% over prior year or $3.05 billion.
Speaking to the effects of the COVID-19 pandemic, the President and CEO shared that he understands that it has been a challenging time for the country, with many lives and livelihoods being significantly affected; he also added that Sagicor has been taking a proactive approach in mitigating against the spread of the virus, with the health and safety of its team members, clients and all our stakeholders being of utmost priority.
Some of the measures implemented to date are:
• Work from Home Programme with at least 60% of team members working remotely
• Distribution of reusable masks to each team member
• Continuous reinforcement of social distancing protocols with relevant markers and guidelines
• Installation of hand sanitizers and contactless water taps
• Contactless thermometers across all offices and branches.
• Strategic initiatives and marketing communication to focus on enhancing our service delivery to clients by electronic means, and rapidly advancing the digitization of our processes
Mr. Zacca noted that despite the impact of the pandemic, the Group’s operating cash flow increased by $4.40 billion and its cash position has improved by $6.10 billion.
Business lines performance for the period were outlined as follows:
• The Individual Life insurance division posted net profits of $1.27 billion, 112% better than 2019. Net premium income of $6.93 billion was 12% higher than the comparative 2019 period. This was driven by higher new sales (API) in 2020 for both Jamaica and Cayman resulting in the inforce block of policies growing by 7% to almost 600,000 policies.
• The Employee Benefits Division produced profits of $1.09 billion, a 13% decrease over prior year. New sales however increased, with annualized new premium income increasing by 42% growth over 2019.
• Sagicor Bank saw a reduction in net profits reporting $0.13 billion for the quarter, primarily due to unbudgeted and unrealized IFRS 9 Expected Credit Losses due to the downgrading of some of our loans due to the COVID 19 effect on the economy. Fee based income through our Payment channels however increased by 12% over prior year to $1.06 billion. Payment Channels are a key area of focus for the bank as the business continues to strengthen its online and digital platforms to facilitate less face-to-face transactions, especially in the COVID-19 environment.
• Sagicor Investments showed strong profitability during the period, contributing $0.53 billion (excluding the share of AGIC earnings) to the Group, which is 43% higher than prior year.
The company reported that despite the decrease in the Group net profits, the Group remain strong and solvent with consolidated cash generated from operating activities being $10.57 billion when compared to $6.16 billion in 2019. The liquidity of the Group also remained strong with Cash and Cash Equivalents at the end of March 2020 being $27.44 billion (2019: $21.34 billion). The Group has maintained its strong capital position and continues to exceed regulatory capital requirements across all entities.
“We remain optimistic as a Group even as we continue to implement several measures to be proactive in order to continue providing top-notch service to our clients and keep our business lines strong, all while ensuring the safety and overall wellbeing of all our stakeholders”, Zacca said.