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ANNOUNCEMENT OF RESULTS AND DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 30 JUNE 2003
The Directors announce the unaudited group results for the year ended 30 June
2003.
SIX MONTHS ENDED TWELVE MONTHS
SUMMARISED INCOME ENDED
STATEMENT
30 JUNE 30 JUNE 31 DEC
Rand thousands Note 2003 2002 2002
GROSS WRITTEN PREMIUM 1 543 845 1 356 914 2 928 097
Underwriting profit/(loss) 5 21 787 4 980 (21 340)
Investment income 6 73 695 64 807 129 227
Investment expenses (2 014) (1 884) (3 572)
93 468 67 903 104 315
Exceptional item - (14 000) (14 000)
Net realised surplus on
disposal of investments 5 678 48 889 54 823
OPERATING INCOME before
taxation 99 146 102 792 145 138
Taxation (24 754) (8 925) (20 673)
NET INCOME after taxation 74 392 93 867 124 465
Outside shareholders
interest therein (1 261) (545) (9 329)
Net income attributable to
members of the Company 73 131 93 322 115 136
SIX MONTHS ENDED TWELVE MONTHS
ENDED
ABRIDGED BALANCE SHEET
Note 30 JUNE 30 JUNE 31 DEC
Rand thousands 2003 2002 2002
ASSETS
Investments 7 761 794 823 452 755 001
Fixed assets 76 090 69 944 78 983
Current assets 685 566 616 470 749 157
Deposits and cash at 816 398 681 287 682 975
bankers
Technical assets 401 860 265 997 401 258
TOTAL ASSETS 2 741 708 2 457 150 2 667 374
EQUITY AND LIABILITIES
Capital and reserves 998 949 990 921 974 650
Minority interest 39 859 48 948 56 345
Deferred taxation 1 322 12 837 4 487
Provision for post
retirement medical cost 70 000 70 000 70 000
Technical provisions 1 387 259 1 121 006 1 326 622
Current liabilities 244 319 213 438 235 270
TOTAL EQUITY AND 2 741 708 2 457 150 2 667 374
LIABILITIES
COMMENTS
Adherence to stricter underwriting principles and addressing pricing levels
through appropriate rating initiatives has resulted in the Company achieving a
growth in gross written premium in the first half of 2003 of 14% (2002: 23%).
This strategic focus, combined with improved claims management, has positively
impacted the underwriting account which shows a significant improvement to
R21,8m (2002: R4,9m).
Improved results are evident in most classes of business. The motor account,
however, continues to be a source of concern. While theft and hijackings have
stabilised, the incidence of accidents and cost of repairs continue to
escalate, impacting on the performance of this account.
Investment income has increased by 13,7% to R73,7m (2002: R64,8m). This
increase was due to improved cash flows.
The surplus arising on disposal of investments totals R5,7m (2002: R48,9m).
While the equity disposal programme continues, opportunities to dispose of
equities in the current depressed market have been limited.
Headline earnings have increased by 22,3% to 548,7 cents per share (2002:
448,7 cents per share). This is due to improved underwriting and investment
earnings.
The solvency margin stands at 41,5%, down from the 2002 year-end of 43,3% as a
result of the continued underperformance of equity markets and growth in
premium income.
While the Directors are confident regarding the Company prospects for the
remainder of the year, it should be noted that short term insurance results
can fluctuate and therefore figures for the first six months are not
necessarily indicative of the year-end result.
After taking into account the financial position of the Company, the Directors
have declared an interim dividend of R1,50 per share. This decision is
consistent with the policy to maintain the solvency margin in the range of 40%
to 50% with 45% being an optimum level.
DIVIDEND DECLARATION NO. 64
The Directors have declared an interim dividend for 2003 of 150 cents per
share (2002: 250 cents per share).
The dividend is payable in accordance with the following timetable:
Last day to trade in order to participate
in the dividend Friday 5 September 2003
Shares commence trading ex the dividend
from the commencement of business on Monday 8 September 2003
Record date Friday 12 September 2003
Payment date Monday 15 September 2003
Shareholders may not dematerialise or rematerialise their holdings of shares
in the Company between Monday 8 September 2003 and Friday 12 September 2003,
both days inclusive.
By order of the Board.
GM Riddell Chairman
NV Beyers Managing Director
Johannesburg
31 July 2003
CONDENSED STATEMENT OF CHANGES IN SIX MONTHS ENDED TWELVE
EQUITY MONTHS ENDED
30 JUNE 30 JUNE 31 DEC
Rand thousands 2003 2002 2002
Balance at beginning of period 974 650 1 013 513 1 013 513
Revaluation of investments (16 240) (46 242) (55 527)
Translation of foreign
subsidiaries (14 323) (14 864) (13 215)
Net income for the period 73 131 93 322 115 136
Dividends (18 269) (54 808) (85 257)
Balance at end of period 998 949 990 921 974 650
TWELVE
CONDENSED CASH FLOW STATEMENT SIX MONTHS ENDED MONTHS ENDED
Rand thousands 30 JUNE 30 JUNE 31 DEC
2003 2002 2002
Cash available from underwriting
operations 88 383 26 702 69 340
Net decrease/(increase) in
working capital 48 446 (16 273) (132 321)
Dividends and interest received 73 695 64 807 129 227
Taxation paid (15 352) (9 893) (43 761)
Dividends paid (18 269) (54 808) (85 257)
Cash effect of investing
activities (43 480) 72 178 147 173
Increase in deposits and cash 133 423 82 713 84 401
NOTES: SIX MONTHS ENDED TWELVE
MONTHS ENDED
30 JUNE 30 JUNE 31 DEC
2003 2002 2002
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 implementation of
AC 133 has had no material
affect on the results of the
Company. Consequently, no change
has been made to the prior year
comparative figures.
2. DETERMINATION OF HEADLINE
EARNINGS
Net income attributable to
members of the Company 73 131 93 322 115 136
After-tax adjustment for:
- Net realised surplus on
disposal of investments and
fixed assets (6 299) (50 007) (52 702)
- Reverse provision for
restructuring cost - (8 400) -
- Provision for restructuring
cost - 5 733 -
- Exceptional item - 14 000 14 000
Headline earnings 66 832 54 648 76 434
Headline earnings per share -
cents 548,7 448,7 627,6
Rand thousands
FOREIGN
3. SEGMENTAL INFORMATION SOUTH SUB- TOTAL
AFRICA SIDIARIES
SIX MONTHS ENDED 30 JUNE 2003
Gross written premium
General insurance business 1 336 074 111 664 1 447 738
Alternative risk transfer
business 96 107 - 96 107
1 432 181 111 664 1 543 845
Profit before taxation
General insurance business 75 018 19 719 94 737
Alternative risk transfer
business 4 409 - 4 409
79 427 19 719 99 146
Net assets
General insurance business 844 115 78 877 922 992
Alternative risk transfer
business 115 816 - 115 816
959 931 78 877 1 038 808
SIX MONTHS ENDED 30 JUNE 2002
Gross written premium
General insurance business 1 156 784 108 495 1 265 279
Alternative risk transfer
business 91 635 - 91 635
1 248 419 108 495 1 356 914
Profit before taxation
General insurance business 78 471 17 563 96 034
Alternative risk transfer
business 6 758 - 6 758
85 229 17 563 102 792
Net assets
General insurance business 884 414 60 957 945 371
Alternative risk transfer
business 94 498 - 94 498
978 912 60 957 1 039 869
TWELVE MONTHS ENDED 31 DECEMBER
2002
Gross written premium
General insurance business 2 394 705 199 415 2 594 120
Alternative risk transfer
business 333 977 - 333 977
2 728 682 199 415 2 928 097
Profit before taxation
General insurance business 88 278 40 535 128 813
Alternative risk transfer
business 16 325 - 16 325
104 603 40 535 145 138
Net assets
General insurance business 851 603 69 597 921 200
Alternative risk transfer
business 109 795 - 109 795
961 398 69 597 1 030 995
SIX MONTHS ENDED TWELVE
MONTHS ENDED
Rand thousands 30 JUNE 30 JUNE 31 DEC
2003 2002 2002
4. OTHER FINANCIAL INFORMATION
Earnings per share before
adjustment - cents 600,4 766,2 945,3
Earnings per share after
excluding exceptional items and
restructuring cost - cents 600,4 846,7 1 060,3
Dividend per share - cents
- Paid in period 150,0 450,0 700,0
- Proposed for period 150,0 250,0 400,0
Number of shares in issue 12 179 500 12 179 500 12 179 500
Net asset value per share -
cents 8 202 8 136 8 002
Solvency margin % 41,5 47,3 43,3
Dividend cover 4,00 3,06 1,35
SIX MONTHS ENDED TWELVE
MONTHS ENDED
Rand thousands 30 JUNE 30 JUNE 31 DEC
2003 2002 2002
5. UNDERWRITING PROFIT/(LOSS) AFTER
CHARGING/(CREDITING)
Depreciation 11 330 8 858 23 913
Surplus on disposal of fixed
assets (1 495) (794) (794)
6. INVESTMENT INCOME
Interest 62 348 53 003 108 617
Dividends 11 347 11 804 20 610
Total investment income 73 695 64 807 129 227
7. INVESTMENTS
Investment properties 54 546 53 297 29 886
Mortgages and loans 11 332 39 912 44 827
Government and other approved
securities 232 428 194 458 190 683
Municipal annuities, other fixed
interest securities 62 96 69
298 368 287 763 265 465
Listed shares 404 462 492 258 435 581
Unlisted shares 58 964 43 431 53 955
Total investments 761 794 823 452 755 001
TRANSFER SECRETARIES
Computershare Limited
70 Marshall Street
Johannesburg
2001
REGISTERED OFFICE
South African Eagle Insurance Company Limited
Registration number 1965/006764/06
SA Eagle House
The Braes
193 Bryanston Drive
Bryanston
2021
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