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South African Eagle Insurance Company Limited - Announcement of results and
dividend declaration
South African Eagle Insurance Company Limited
A member of the Zurich Financial Services Group
Announcement of results and dividend declaration for the six months ended 30
June 2002
Comments
The rating adjustments that were necessary following the events of September 11
last year in order to ensure appropriate pricing levels have continued for the
first six months of this year. Quality capacity is available only at a premium
and the company has benefited from the ever-growing demand for insurers that are
considered to be financially stable.
These factors, together with the continuing market consolidations and
inflationary increases in sums insured, have resulted in the company achieving a
growth in gross written premium of 23% in 2002.
The underwriting account shows a profit of R4,9 million (2001 - loss of R16,6
million) in spite of the poor performance of the motor account where we have
seen the average cost of repairs escalate by more than 17,2% as a result of the
impact of the weaker rand on imported parts and increased labour costs.
Remedial action for the remainder of the year will include further rating
increases on selected under-performing portions of this business, the separation
and centralisation of our personal lines book from our commercial business and a
continued focus on our group scheme business, as well as improved management of
our claims processes.
In addition, our preference to write fire and allied risks following the re-
rating of business to realistic levels is leading to a better balance of our
overall portfolio.
Investment income was marginally lower at R64,8 million (2001 - R68,2 million).
This reduction was due to the decline in dividend income which benefited from
special dividends amounting to R6,3 million in 2001.
The exceptional item of R14 million is as a result of the cancellation of
software licences and IT outsourcing agreements for the Golden Eagle `e-
commerce` business to business solution where a more cost effective long term
alternative was identified.
The surplus on disposal of investments of R48,9 million (2001 - R55,3 million)
is due to the continuing programme of disposals of equities to re-balance the
portfolio of investments.
The solvency margin stands at 47,3% down from the 2001 year end of 53,9% due to
the substantial growth in premium income in the period.
Dividend declaration No. 62
1. The Directors have declared an interim dividend for 2002 of 250 cents per
share (2001: 250 cents per share).
2. The dividend is payable in accordance with the following timetable:
Last day to trade in order to participate in the dividend 6 September
Shares commence trading ex the dividend from the
commencement of business on 9 September
Record date 13 September
Payment date 16 September
Shareholders may not dematerialise or rematerialise their holdings of shares in
the Company between Monday, 9 September 2002 and Friday, 13 September 2002, both
days inclusive.
By order of the Board
PHP O`Sullivan, Chairman NV Beyers, Managing Director
Johannesburg
31 July 2002
Transfer secretaries
Computershare Investor Services Limited
8th Floor
11 Diagonal Street
Johannesburg
2001
Registered office
South African Eagle Insurance Company Limited
Registration number 1965/06764/06
Share code: SAE ISIN: ZAE00006243
SA Eagle House
The Braes
193 Bryanston Drive
Bryanston
2021
Summarised income statement
Six Twelve
Months Months
Ended ended
30 June 30 June 31 December
Rand thousands Note 2002 2001 2001
Gross written 1 356 914 1 103 406 2 378 997
premium
Underwriting 5 4 980 (16 555) (8 682)
profit/(loss)
Investment 6 64 807 68 173 156 207
income
Investment (1 884) (3 415) (6 753)
expenses
67 903 48 203 140 772
Exceptional item (14 000) - -
Net realised
surplus on
disposal
of investments 48 889 55 264 114 761
Restructuring - - (7 175)
cost
Impairment of
investment in
Zimbabwe - - (10 000)
subsidiary
Operating income 102 792 103 467 238 358
before taxation
Taxation (8 925) (11 728) (82 311)
Net income after 93 867 91 739 156 047
taxation
Outside (545) (1 149) (13 744)
shareholders`
interest therein
Net income
attributable to
members
of the company 93 322 90 590 142 303
Dividends - (54 808) (54 808) (85 257)
Normal
Retained income 38 514 35 782 57 046
Abridged balance sheet
30 June 30 June 31 December
Rand thousands Note 2002 2001 2001
Assets
Investments 7 823 452 934 345 957 949
Fixed assets 69 944 54 772 69 747
Current assets 616 470 541 858 672 071
Deposits and 681 287 498 415 598 574
cash at bankers
Total assets 2 191 153 2 029 390 2 298 341
Equity and
liabilities
Capital and 990 921 994 089 1 013 513
reserves
Minority 48 948 43 546 55 756
interest
Deferred 12 837 - 15 289
taxation
Provision for 70 000 70 000 70 000
post-retirement
medical cost
Technical 855 009 741 126 830 902
provisions
Current 213 438 180 629 312 881
liabilities
Total equity 2 191 153 2 029 390 2 298 341
and liabilities
Condensed statement of changes in equity
Twelve
months
Six months ended ended
30 June 30 June 31 December
Rand 2002 2001 2001
thousands
Balance at 1 013 513 936 181 936 181
beginning of
period
Revaluation (46 242) 19 407 9 769
of
investments
Translation (14 864) 2 719 10 517
of foreign
subsidiaries
Net income 93 322 90 590 142 303
for the
period
Dividends (54 808) (54 808) (85 257)
Balance at 990 921 994 089 1 013 513
end of
period
Condensed cash flow statement
Twelve
months
Six months ended ended
30 June 30 June 31 December
Rand thousands 2002 2001 2001
Cash available from 26 702 28 004 113 593
underwriting
operations
Net increase in (16 273) (69 (75 697)
working capital 985)
Dividends and 64 807 68 173 156 207
interest received
Taxation paid (9 893) (64 (93 461)
742)
Dividends paid (54 808) (54 (85 257)
808)
Cash effect of 72 178 138 682 130 098
investing activities
Increase in deposits 82 713 45 324 145 483
and cash
Notes
1. Accounting policies
The interim financial statements have been prepared in accordance with the South
African Statement of Generally Accepted Accounting Practice on Interim Financial
Reporting. The same accounting policies and methods of computation are followed
in the interim statements as compared with the most recent annual financial
statements.
Twelve
months
Six months ended
ended
30 June 30 June 31 December
Rand thousands 2002 2001 2001
2. Determination of headline
earnings
Net income attributable to 93 322 90 590 142 303
members of the company
After-tax adjustment for:
- Net realised surplus on
disposal of investments
and fixed assets (50 007) (45 697) (113 001)
- Impairment of investment in - - 10 000
Zimbabwe subsidiary
- Reverse provision for (8 400) (12 112) (12 112)
restructuring cost
- Provision for restructuring 5 733 10 481 8 400
cost
Headline earnings 40 648 43 262 35 590
Headline earnings per share - 333,7 355,2 292,2
cents
3. Segmental information
Foreign
South Subsi- Total
Africa diaries
Six months ended 30 June 2002
Gross written premium
General insurance business 1 156 784 108 495 1 265 279
Alternative risk transfer 91 635 - 91 635
business
1 248 419 108 495 1 356 914
Profit before taxation
General insurance business 78 471 17 563 96 034
Alternative risk transfer 6 758 - 6 758
business
85 229 17 563 102 792
Net assets
General insurance business 884 414 60 957 945 371
Alternative risk transfer 94 498 - 94 498
business
978 912 60 957 1 034 869
Six months ended 30 June 2001
Gross written premium
General insurance business 943 040 99 880 1 042 920
Alternative risk transfer 60 486 - 60 486
business
1 003 526 99 880 1 103 406
Profit before taxation
General insurance business 86 423 12 983 99 406
Alternative risk transfer 4 061 - 4 061
business
90 484 12 983 103 467
Net assets
General insurance business 895 706 48 651 944 357
Alternative risk transfer 93 278 - 93 278
business
988 984 48,651 1 037 635
Twelve months ended 31 December
2001
Gross written premium
General insurance business 1 945 478 219 097 2 164 575
Alternative risk transfer 214 422 - 214 422
business
2 159 900 219 097 2 378 997
Profit before taxation
General insurance business 183 800 37 269 221 069
Alternative risk transfer 17 289 - 17 289
business
201 089 37 269 238 358
Net assets
General insurance business 904 159 66 315 970 474
Alternative risk transfer 98 795 - 98 795
business
1 002 954 66 315 1 069 269
Twelve
months
Six months ended
ended
30 June 30 June 31 December
Rand thousands 2002 2001 2001
4. Other financial information
Earnings per share before 766,2 743,8 1 168,4
adjustment - cents
Earnings per share after
excluding exceptional
items, exceptional tax charges,
interest from
NBS case, restructuring costs and
impairment
of investment in subsidiary - 846,7 743,8 1 567,0
cents
Dividend per share - cents
- Normal paid 450,0 450,0 700,0
- Normal proposed 250,0 250,0 -
Number of shares in issue 12 179 500 12 179 12 179 500
500
Net asset value per share - cents 8 136 8 162 8 321
Solvency margin % 47,3 60,3 53,9
Dividend cover 3,06 2,98 1,67
5. Underwriting profit/(loss)
after
charging/(crediting)
Depreciation 8 858 5 615 13 666
Surplus on disposal of fixed (794) (811) (240)
assets
6. Investment income
Interest 53 003 47 909 113 998
Dividends 11 804 20 264 42 209
Total investment income 64 807 68 173 156 207
7. Investments
Fixed properties 53 297 52 787 57 414
Mortgages and loans 39 912 19 856 54 534
Government and other approved 194 458 145 811 178 674
securities
Municipal annuities, other fixed 96 104 102
interest securities
287 763 218 558 290 724
Listed shares 492 258 616 971 582 964
Unlisted shares 43 431 98 816 84 261
Total investments 823 452 934 345 957 949
www.saeagle.co.za
Date: 01/08/2002 05:53:28 PM Produced by the JSE SENS Department
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