US$81m profit for Sagicor

Sagicor is reporting an “outstanding” third quarter performance, including a US$81 million net profit attributable to is shareholders.

As they look to the rest of the financial year, senior management of the group say that following Hurricane Melissa’s recent devastation in Jamaica they expect no more than a US$10 million “potential net income hit”
in that country.

The financial services provider in Canada, the United States (US), and the Caribbean, recently  announced its results for the third quarter ended September 30.

Sagicor Financial Company Ltd president and chief executive officer Andre Mousseau, told an earnings conference call: “I’m very pleased for us to announce another outstanding quarterly performance. On a core basis, our results reflect broad-based strength.

“Our Canadian business continues to show outstanding profitability, our US business grew its assets by about US$250 million from the prior quarter and continues to generate strong spreads, and both of our Caribbean operating segments showed strong core profitability, reflecting progress on initiatives that we’ve been working on for years.”

He said the US$81 million in net income to shareholders reflected those strong core numbers “plus a reversal of some of the income volatility that had gone the other way earlier in the year and seems endemic under the IFRS 17 standard”.

“With these strong results, coupled with some opportunistic share buybacks, we’re at a record book value per share whether you follow in Canadian or US dollars,” Mousseau added.

Sagicor’s financial report covered the period before Hurricane Melissa made landfall in Jamaica on October 28.

The group’s chief financial officer Kathy Jenkins told the conference call that “with respect to the economic impact on our business, our preliminary estimate is that the impact in quarter four will be either immaterial or just marginally material to Sagicor at a group level”.

“So today we would say a potential net income hit of US$5 million to US$10 million to SFC. Our small property and casualty business in Jamaica is heavily reinsured and could only generate losses of less than US$3 million,” she told financial analysts from RBC Capital Markets, National Bank Financial, Scotiabank and Acumen Capital Partners.

“It will take more time to assess the impact on our lending portfolio through our bank in Jamaica, but again, our major clients are insured with other companies and so we are talking primarily about the knock-on effects to small borrowers.

“We are assessing forbearance for a number of smaller customers, doing the right thing for customers in affected areas as they sort themselves out, not ultimately economic losses necessarily.”

Jenkins added: “And we have also given well over US$1 million so far directly to relief efforts that we and other private sector leaders are championing, and we will expense those.

“Once you factor in the fact that we own 49 per cent of the Jamaican operations, our view today is that SFC’s net exposure will be below US$10 million.

“Prior to this event, our Jamaican business was really hitting on all cylinders, so we believe our Jamaican business will come back strong in 2026 and beyond as rebuilding efforts may stimulate the economy there.”

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