Sagicor Financial Company (SFC) Q2 2024 earnings summary

Executive summary

• Core earnings to shareholders reached $25.3 million in Q2 2024, up 81% year-over-year, while net loss to shareholders was $40.2 million due to $55 million in market experience losses and one-time debt-related costs from the ivari acquisition.

• Revenues year-to-date reached $1.2 billion, with Q2 revenues at $606.2 million, reflecting stable growth across all segments.

• Annualized core return on shareholders' equity was 10.9% for the quarter.

• Shareholders' equity stood at $897.7 million, with book value per share at $6.36 (USD) or CAD 8.71.

• Dividend of $0.06 per share declared for Q3 2024, marking the nineteenth consecutive payment.

Financial highlights

• Core earnings to shareholders increased to $25.3 million from $14.0 million in Q2 2023, led by Sagicor Canada and offset by higher interest costs from the ivari acquisition.

• Net loss to shareholders was $40.2 million, compared to net income of $48.8 million in Q2 2023, mainly due to $55.1 million in market experience losses and one-time debt costs.

• Sagicor Life and Sagicor Jamaica segments grew year-over-year due to repricing and improved insurance experience.

• Sagicor Life USA's core earnings declined due to negative insurance experience.

• Group-LICAT ratio was 138% and MCCSR ratio was 309%, both above regulatory minimums.

Outlook and guidance

• Updated 2024 core net income to shareholders guidance to $80–$90 million, reflecting $9 million in year-to-date negative experience.

• New business CSM (net of reinsurance) expected between $160–$180 million, slightly lower due to the interest rate environment.

• 2025 target remains 10%+ core net income growth, with a medium-term core ROE target of 13%+ and a dividend payout ratio of 30–40%.