Skagi (SKAGI) Q2 2024 earnings summary

Executive summary

• Achieved robust turnaround in insurance operations, with 10.4% YoY insurance revenue growth and combined ratio improvement to 96.8% in H1 2024 from 103.7% in H1 2023.

• Financial services income grew 86% YoY pro forma, but posted a pre-tax loss of ISK 119m due to challenging Q2 market conditions.

• Group profit after tax was ISK 273m, down 75% YoY, with core revenue at ISK 14,961m and assets at ISK 68,693m.

• Investment returns on insurance assets were 3.0% (down from 5.7% in H1 2023), with financial income of ISK 1,298m.

• Competition authorities approved Skagi's acquisition of Íslensk Verðbréf, expected to boost AUM to ISK 220bn upon completion.

Financial highlights

• Insurance revenue reached ISK 14,002m in H1 2024, up 10.4% YoY; life and health insurance grew 15.5%.

• Net insurance service income was ISK 3,293m, up 31% YoY; insurance contract result ISK 453m, a 196% increase.

• Net financial services income was ISK 960m in H1 2024, up 86% YoY pro forma.

• Dividend of ISK 1,000m (ISK 0.524 per share) paid in April 2024.

• Basic and diluted EPS for H1 2024 was ISK 0.15, down from ISK 0.63 in H1 2023.

Outlook and guidance

• Target combined ratio for insurance business is below 95% for FY2024, with H1 actual at 96.8%.

• Financial services income guidance for 2024 is ISK 1.9–2.6bn; H1 2024 achieved ISK 960m.

• Investment return target is 11% based on market assumptions; H1 2024 return was 3.0%.

• Full-year outlook remains unchanged and within guidance ranges.