Sagicor’s Bottom-Line Improves Amidst Disposal of Impaired Assets and Improvement in Asset Prices

• For the first quarter ending March 2021, Sagicor Group Jamaica reported $2.91Bn (EPS: $0.75) in net profit attributable to shareholders,  a 54.5% over Q1 2020 when the Group took a hit from the impact of the COVID-19 pandemic on asset prices and its operations.
• The outturn reflects a 3.9% (or $151.68Mn) increase in profit before associates and joint ventures and the absence of impairment charges on investment in associates and goodwill and loss from associates that was registered in the same period last year.
• Last year Sagicor incurred significant impairment charges of over $1.00Bn on goodwill and investment in associate. With the disposal of its holdings in its associate (Playa), it did not have to contend with these charges in 2021.
• The increase in profit before associates and joint ventures was primarily due to a 37.7% increase in total revenues aided by realized and unrealized capital gains of $1.20Bn, relative to losses of -$5.06Bn incurred in the prior year during the COVID-19 induced sell-off that weighed heavily on asset prices. However, this was largely offset by a $6.17Bn increase in total benefits and expenses to $19.07Bn.
• Economic conditions in its operating environment have begun to improve, albeit slowly and with a lot of uncertainty as the pandemic persists. However, the anticipated recovery augurs well for an improvement in revenues, lower credit losses, and the performance of joint ventures and associates.
• Since the start of the year, Sagicor’s stock price has depreciated by 1.1% and currently trades at $49.11 per share implying a P/E multiple of 12.9x earnings. This is below the main market financial sector average of 19.3x earnings.

(Source: Sagicor Financials)