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South African Eagle Insurance Company Limited - Announcement Of The Reviewed
Release Date: 12/02/2004 17:00:01 Code(s): SAE
SOUTH AFRICAN EAGLE INSURANCE COMPANY LIMITED - ANNOUNCEMENT OF THE REVIEWED
RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2003
SOUTH AFRICAN EAGLE INSURANCE COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1965/006764/06)
Share code: SAE ISIN: ZAE000006243
Announcement of the reviewed results and dividend declaration
for the year ended 31 December 2003
The Directors announce the Group results for the year ended 31 December 2003.
******************************************************************
SUMMARISED INCOME STATEMENT Twelve Twelve
months months
ended 31 ended 31
Dec Dec
Rand thousands Note 2003 2002
******************************* **** ********** ***********
GROSS PREMIUMS 3,189,100 2,928,097
Underwriting profit/(loss) 5 127,703 (21,340)
Investment income 6 152,772 129,227
Investment expenses (3,346) (3,572)
277,129 104,315
Exceptional item - (14,000)
Net realised surplus on 49,914 54,823
disposal of investments
PROFIT before tax 327,043 145,138
Taxation (81,968) (20,673)
PROFIT after tax 245,075 124,465
Minority and cell shareholders" (21,156) (9,329)
interest
Net profit attributable to 223,919 115,136
members of the Company
Dividends paid (36,539) (85,257)
RETAINED INCOME 187,380 29,879
******************************* **** ********** ***********
HEADLINE EARNINGS PER SHARE 2 1,475.5 627.6
(cents)
EARNINGS PER SHARE (cents) 1,838.5 945.3
******************************* **** ********** ***********
ABRIDGED BALANCE SHEET 31 Dec 31 Dec
Rand thousands Note 2003 2002
ASSETS
Property, plant and equipment 71,335 78,983
Investments 7 785,089 755,001
Deferred tax assets 8,293 -
Technical assets 408,776 401,258
Current assets 774,142 749,157
Cash and cash equivalents 889,121 682,975
TOTAL ASSETS 2,936,756 2,667,374
******************************* **** ********** ***********
EQUITY AND LIABILITIES
Shareholders" equity 1,197,872 974,650
Minority shareholders" interest 2,958 2,640
in subsidiaries
Due to cell shareholders" 51,822 53,705
Deferred tax liabilities - 4,487
Retirement benefit obligations 68,941 70,000
Technical provisions 1,396,865 1,326,622
Current liabilities 218,298 235,270
TOTAL EQUITY AND LIABILITIES 2,936,756 2,667,374
******************************************************************
COMMENTARY
The improvement in the underwriting result reported in the first half of the
year continued into the second half with underwriting profit showing excellent
improvement to R127,7m compared to a loss of R21,3m in 2002. Gross written
premiums increased by 8,9% to R3,189m reflecting the continued adherence to
strict underwriting principles and appropriate pricing levels.
All underwriting accounts produced a profit in the second half of 2003. With
declining interest rates it is critical that this improved underwriting
performance is maintained. Further rating action is planned particularly in
respect of the motor account which has continued to underperform the other
accounts. Claims are closely monitored and the controls over claims costs
continue to be improved.
Investment income was R23,5m higher than 2002 at R152,8m. This increase reflects
improved cash flows resulting from the improved underwriting performance. The
equity disposal programme continued with the surplus arising on the disposal of
investments totalling R49,9m (2002: R54,8m).
Headline earnings have increased by 135,1% to 1,475.5 cents per share. The
solvency margin has improved to 47,1% compared to 43,3% at the end of 2002 and
41,5% at the half year.
The Directors have declared a final dividend of 300 cents per share (2002: 150
cents per share). The total dividend for the year is 450 cents per share (2002:
400 cents per share).
*****************************************************************
CONDENSED STATEMENT OF CHANGES IN Twelve Twelve
EQUITY months months
ended 31 ended 31
Dec Dec
Rand thousands 2003 2002
************************************ *********** ***********
Balance at beginning of the year 974,650 1,013,513
Revaluation of investments 36,683 (55,527)
Translation of foreign subsidiaries (841) (13,215)
Net income for the year 223,919 115,136
Dividends (36,539) (85,257)
Balance at end of the year 1,197,872 974,650
************************************ *********** ***********
CONDENSED CASH FLOW STATEMENT
Cash retained from operating 187,767 69,340
activities
Net increase in working capital (5,325) (132,321)
Dividends, interest and rental 150,350 129,227
received
Taxation paid (91,411) (43,761)
Dividends paid (36,539) (85,257)
Cash effect of investing activities 1,304 147,173
Net Increase in cash and cash 206,146 84,401
equivalents
************************************ *********** ***********
NOTES:
1 Accounting policies
The financial statements are prepared in accordance and
comply with South African Statements of Generally Accepted
Accounting Practice. The implementation of AC133 resulted
in the unrealised gains or deficits on trading investments,
previously transferred to investment reserves, now being
credited or charged to the income statement during the
current year.
2 Determination of headline earnings
Net profit attributable to 223,919 115,136
members of the Company
After-tax adjustment for:
- Net realised surplus on (44,215) (52,702)
disposal of investments and
property, plant and equipment
- Exceptional item - 14,000
Headline earnings 179,704 76,434
Headline earnings per share 1,475.5 627.6
(cents)
3 Segmental information
Gross written premium
General insurance business 2,924,445 2,594,120
Alternative risk transfer 264,655 333,977
business
3,189,100 2,928,097
Profit before taxation
General insurance business 282,428 128,813
Alternative risk transfer 44,615 16,325
business
327,043 145,138
Net assets
General insurance business 1,112,799 921,200
Alternative risk transfer 139,853 109,795
business
1,252,652 1,030,995
4 Other financial information
Earnings per share before 1,838.5 945.3
adjustment (cents)
Earnings per share after 1,838.5 1,060.3
excluding exceptional item
(cents)
Dividends per share (cents)
- Paid/declared 450.0 400.0
Number of shares in issue 12,179,500 12,179,500
Net asset value per share 9,835 8,002
(cents)
Solvency margin % 47.1 43.3
Dividend cover 4.1 2.4
5 Profit before tax after
charging/(crediting)
Depreciation 23,336 23,913
Surplus on disposal of property, (1,495) (794)
plant and equipment
Unrealised gains on trading 2,422 -
bonds
6 Investment income
Interest and rental income 132,318 108,617
Dividends 20,454 20,610
Total investment income 152,772 129,227
7 Investments
Investment properties 27,156 29,886
Investment in associates 19,830 22,433
- Listed 6,573 5,910
- Unlisted 13,257 16,523
Mortgages and loans 9,415 44,827
Available-for-sale investments 474,355 515,389
Ordinary shares
- Listed 431,400 429,671
- Unlisted 37,855 35,349
Preference shares
- Unlisted 2,118 2,083
Government and other approved 2,931 48,217
securities
Municipal annuities and other 51 69
fixed interest securities
Trading investments 254,333 142,466
Total investments 785,089 755,001
8 Change in accounting policy
During the current year the
Group implemented AC133,
financial instruments. The
effect on shareholders" equity
is as follows:
Restatement of opening retained 3,152 -
income
Restatement of investment (3,152)
reserve
9 Auditors
The preliminary announcement has been reviewed by the
Company"s external auditors, PricewaterhouseCoopers Inc. A
copy of their review opinion in available on request at the
Company"s registered office.
*****************************************************************
DIVIDEND DECLARATION NO. 65
The Directors have declared a final dividend for 2003 of 300 cents per share
(2002: 150 cents per share) giving a total for the year of 450 cents per share
(2002: 400 cents per share).
The dividend is payable in accordance with the following timetable:
Last day to trade in order to Tuesday, 6 April 2004
participate in the dividend
Shares commence trading ex the Wednesday, 7 April 2004
dividend from the commencement of
business on
Record date Friday, 16 April 2004
Payment date Monday, 19 April 2004
Share certificates may not be dematerialised or rematerialised between
Wednesday, 7 April 2004 and Friday, 16 April 2004 both days inclusive.
Should 14 April 2004 not officially be declared a public holiday, an amendment
to the salient dates will be published on
SENS and in the press.
By order of the Board.
GM Riddell Chairman NV Beyers Managing Director
Johannesburg, 11 February 2004
Registered office
South African Eagle Insurance Company Limited
SA Eagle House
The Braes
193 Bryanston Drive
Bryanston
2021
PO Box 61489
Marshalltown
2107
Transfer secretaries
Computershare Limited
Registration number 2000/006082/06
70 Marhsall Street
Johannesburg
2001
PO Box 61051
Marhsalltown
2107
Sponsor
RAND MERCHANT BANK, a division of FirstRand Bank Limited, CORPORATE FINANCE
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