KY­RON REG­IS

ky­ron.reg­is@guardian.co.tt

Af­ter ex­pe­ri­enc­ing a $40.9 mil­lion net loss in the first quar­ter of 2020, Guardian Hold­ings Ltd (GHL) has ex­pe­ri­enced a prof­itable sec­ond quar­ter, record­ing net in­come of $194.5 mil­lion—yet still, the net prof­it for the Group’s Half Year re­sults de­clined by 39.5 per cent (from $253.6 mil­lion to $153.6 mil­lion) when com­pared to the pre­vi­ous year.

In GHL’s unau­dit­ed fi­nan­cial state­ments, Chair­man Patrick Hyl­ton ex­pressed that the group “has pro­duced a strong per­for­mance in its sec­ond quar­ter which is ex­treme­ly pos­i­tive as we have re­versed the loss from the first quar­ter, and we have ex­ceed­ed the sec­ond quar­ter per­for­mance of 2019.”

Hyl­ton al­so ac­knowl­edged that the GHL’s per­for­mance is be­hind that of last year, record­ing a prof­it at­trib­ut­able to eq­ui­ty share­hold­ers of $165 mil­lion, an $82 mil­lion or 33% re­duc­tion on the $247 mil­lion record­ed in the sim­i­lar pe­ri­od last year. GHL’s earn­ings per share al­so de­creased to $0.71 ver­sus $1.06 over the same pe­ri­od last year.

In the first quar­ter Chair­man’s Re­port, Hyl­ton re­vealed that the loss­es dur­ing that pe­ri­od arose from the com­pa­ny’s in­vest­ment port­fo­lios. He added that it is en­cour­ag­ing that, in­ter­na­tion­al­ly, the eq­ui­ty mar­kets have re­cov­ered much of their loss­es. How­ev­er, Hyl­ton re­vealed that re­gion­al mar­kets have ex­pe­ri­enced a fur­ther de­cline.

He said: “This eq­ui­ty and bond mar­ket per­for­mance sig­nif­i­cant­ly af­fect­ed the Group’s Net in­come from in­vest­ing ac­tiv­i­ties which gen­er­at­ed in­come of $316 mil­lion, a 53% re­duc­tion on the $671 mil­lion record­ed in the same pe­ri­od last year.”

There­fore, GHL’s net fair val­ue loss­es were a ma­jor con­tribut­ing fac­tor to this de­cline, amount­ing to $309 mil­lion com­pared to a gain of $224 mil­lion in the pri­or pe­ri­od.Pos­i­tive­ly, Hyl­ton not­ed that in­vest­ment in­come in­creased by $26 mil­lion aris­ing out of an im­proved in­vest­ment mix and an in­creased in­vest­ment port­fo­lio.

He added that Net in­come from in­sur­ance un­der­writ­ing ac­tiv­i­ties pro­duced stel­lar re­sults, gen­er­at­ing in­come of $551 mil­lion, a $268 mil­lion or 94% in­crease over the $283 mil­lion re­port­ed in the cor­re­spond­ing pe­ri­od last year.

Ac­cord­ing to Hyl­ton, this was large­ly ow­ing to im­prove­ments in the Life, Health and Pen­sion busi­ness seg­ment which in­creased in­come by $203 mil­lion over the pri­or year. The Prop­er­ty and Ca­su­al­ty busi­ness seg­ment al­so in­creased in­come by $53 mil­lion over the pri­or year dri­ven by growth in the Dutch mar­kets, Hyl­ton not­ed.

“Amidst the chal­leng­ing eco­nom­ic con­di­tions, the on­set of the COVID-19 pan­dem­ic has al­so cre­at­ed sig­nif­i­cant ob­sta­cles for the col­lec­tion of pre­mi­ums. To over­come this, your Group launched var­i­ous on­line por­tals to sup­port cus­tomer in­ter­ac­tions,” said Hyl­ton.

While this proved to be gen­er­al­ly ef­fec­tive, the Chair­man said that some of GHL’s cus­tomers main­tained a pref­er­ence for the tra­di­tion­al meth­ods of over the counter col­lec­tion. This, he added, im­pact­ed Gross Writ­ten Pre­mi­ums which showed a mod­est in­crease of 1%.

Ad­di­tion­al­ly, Hyl­ton said that GHL’s bro­ker­age ac­tiv­i­ties con­tin­ue to grow pri­mar­i­ly through in­or­gan­ic means, achiev­ing an in­come of $73 mil­lion which rep­re­sents a 21 per cent in­crease over the $60 mil­lion record­ed in the pri­or year. He ex­pressed that seg­ment re­mains an in­te­gral part of the Group’s port­fo­lio as it rep­re­sents a rel­a­tive­ly low-risk busi­ness.

GHL’s op­er­at­ing ex­pens­es amount­ed to $618 mil­lion, a 1 per cent in­crease over the $610 mil­lion re­port­ed in the cor­re­spond­ing pe­ri­od last year. The Chair­man dis­closed that this in­crease is as a re­sult of ac­quired busi­ness­es, pri­mar­i­ly with­in the Bro­ker­age seg­ment.

He al­so re­vealed that core ex­pens­es re­duced over the pri­or year, as the Group has been suc­cess­ful in fund­ing its strat­e­gy to im­ple­ment the mech­a­nisms and tech­nolo­gies re­quired to ad­vance its com­pet­i­tive edge through cost sav­ings with­in oth­er ar­eas.