By Al Edwards, Financial EditorLIFE Insurance leader, Life of Jamaica (LoJ), a subsidiary of Barbados-based Sagicor, is reporting a 21 per cent rise in net profits for the first quarter of 2004.
The company, headed by Richard Byles, posted net profits after taxes of $311 million, about 21 per cent better than the profits for the corresponding period in 2003. The profits derived from
revenues of $1.6 billion, an impressive 52 per cent increase
on the figure for the corresponding period last year.
LoJ's basic earnings per stock unit for the quarter was $0.12 as against $0.15 for the same period last year. On a fully diluted basis, the figures were $0.11 for the first quarter of 2004 and $0.13 for the first quarter of 2003.
The ordinary shares in issue grew from 1,674,582,000 at March 2003 to 2,540,890,000 at March 2004.
At March 31, 2004, the LoJ share price was $7.20, an 85 per cent jump when compared with the price of $3.90 at December 31, 2003. With 2,540, 890,000 shares in issue at the end of March 2004, the market capitalisation was $18.3 billion.
According to a release put out by LoJ, "The generation of strong new business was an important driver of the results for the first quarter of 2004. Individual Life settled annualised premium income (API) for the period was $190.3 million, exceeding the target by 23 per cent, and sales for the same period last year by 78 per cent. This performance reflects the motivation of our sales team and the excitement created by the launch of the new Triple Policy in January. Impressive new business was also seen in the Employee Benefits area, where new API, including single premium annuities, was $246.2 million. This activity was more than twice the business written for the same period last year and the target for 2004."
ASSET BASE
LoJ's asset base, including the Segregated Funds which are managed on behalf of policyholders, grew by seven per cent, from $16.4 billion at the end of 2003 to $17.5 billion by the end of March 2004. Total assets under management, including the LoJ Pooled Investment Funds and the Diversified Investment Funds at the end of March 2004 were $41 billion, up from $36.4 billion at December 2003.
Stockholders' equity increased to $4.7 million, up from $3.8 billion at the end of 2003. In addition to net profits for the period of $311 million, stockholders' equity grew by $460 million on account of unrealised capital appreciation on available-for-sale securities, which was taken directly to equity. The annualised return on average total assets was 10 per cent, the return on invested assets was 13.2 per cent and there was a 29.2 per cent return on equity.
Very good yields were generated by the segregated policy funds, the Diversified Investment Fund and the pension funds being managed under trust through the subsidiary, LoJ Pooled Investment Funds. These yields ranged from 20 per cent in the PIF money market to 187 per cent in the PIF Equity Fund.
THE MACRO VIEW
LoJ's chairman Arthur Bethell's statement read: "For the year 2004 so far, the Jamaican economy has been characterised by declining interest rates, a buoyant stock market which grew by almost 50 per cent during the first quarter, the currency exchange rate remaining stable and the inflation rate showing some improvement. These macroeconomic factors have significantly influenced the performance of the LoJ Group.
"We were heartened by the Minister of Finance's declaration of no new taxes and the removal of GCT on health insurance premiums effective June 1, 2004. Our outlook for the remainder of the year therefore remains positive but guarded. We will be focused on controlling costs, maximising returns on investments and retaining market leadership, while
delivering the very highest level
of service to our clients."
