SAGICOR Group Jamaica Limited (SJ) achieved its highest first-quarter (January – March) earnings to date as its net profit attributable to shareholders grew by 31 per cent to $3.82 billion, a figure which exceeded the $2.70 billion recorded in Q1 2019.

The diversified financial services conglomerate’s revenue remained flat during the quarter at $23.76 billion as net premium income and net investment income grew to $13.12 billion and $5.44 billion, respectively. The five per cent growth in net premium income was largely attributable to the acquisition of the NCB Jamaica’s health insurance portfolio. Hotel revenue relating to Sagicor Real Estate X-Fund Limited’s Double Tree by Hilton Hotel in Orlando, Florida, spiked by 138 per cent to $1.72 billion.

“Despite the challenges currently facing the world, the economic outlook for Jamaica remains optimistic. Fitch affirmed Jamaica’s economic outlook at B+, which indicates a stable and favourable business climate. The positive rating was based on the expectation of a decline in debt post-pandemic,” the shareholder report stated.

Its total expenses decreased by three per cent to $18.45 billion as the group experienced a $1.75-billion actuarial reserve release largely stemming from its individual lines segment. All other expense items rose, with net benefits incurred rising by 15 per cent to $9.07 billion while administrative expenses grew by 16 per cent to $6.44 billion. Operating profit for the group improved by 30 per cent to $5.30 billion.

Its joint venture, Sagicor Costa Rica SCR saw a three per cent decline to $427.40 million. After accounting for higher taxation costs, the group’s consolidated net profit rose by 38 per cent to $4.02 billion, with the earnings per share moving from $0.75 to $0.98. The employee benefits segment continues to be impacted by higher group death and health claims while investment banking was adversely affected by the unfavourable trading conditions and market volatility.

On March 24, SJ and its subsidiary Sagicor Life Jamaica Limited sold 191,912,708 shares of X-Fund across five transactions at $8.35 for a consideration of $1.60 billion. This resulted in SJ’s overall stake decreasing from 29.31 to 20.75 per cent. X-Fund had $13.88 billion spread across cash, financial investments, and repurchase agreements at the end of December.

The transaction occurred a day after the Bank of Jamaica deemed SJ’s newest acquisition, Alliance Financial Services Limited (AFSL), fit and proper to operate its cambio and remittance services after being suspended since December 3. SJ put out in a recent disclosure that it was not in a position to disclose the cost of the AFSL acquisition due to the presence of certain time-bound conditional terms within the contract with the sellers of AFSL, which over time may impact the final closing price of the transaction.

SJ’s total assets rose by nine per cent year over year to $525.36 billion as the group invested $26 billion into investment purchases as it recorded a $6.18-billion reduction on its bond portfolio due to rising interest rates on the valuations. Its cash and cash resources ended the period at $34.17 billion. Total liabilities and equity attributable to shareholders grew to $394.32 billion and $109.46 billion, respectively.

SJ’s stock price remains flat year to date at $55.07, which gives it a market capitalisation of $215.08 billion. The Sagicor Pooled Equity Fund and GraceKennedy Pension Fund Custodian Limited increased their stakes during the quarter while Ideal Portfolio Services Limited decreased its ownership. Assets under management have increased to $925.05 billion at the end of March.

“Sagicor Group Jamaica continues to monitor all of these macro variables in its management of the company and remains conservative in its outlook. The mental and physical well-being of our team, our clients, and Jamaica as a whole, are as always at the forefront of what we do and who we are,” the report closed.