NEWS | Wednesday, 30 April 2008

Middlesea Group registers €9.3 million profit

Increased dividend proposed

“The strong financial fundamentals and clear strategy of the Middlesea Group enabled it to register most encouraging results for the year 2007, notwithstanding various challenges including the high volatility in the international capital markets,” a spokesperson for Middlesea said in a press statement.
Mario C. Grech, Executive Chairman of the Middlesea Group said that through the consistent growth in premium income, both general and long-term business, the shareholders would continue to benefit from the ’s strategy based on the attainment of a balanced business mix from a geographical spread through varied distribution. All companies within the contributed to the generation of this year’s pre-tax profit of €9.3million (Lm4m), which represented an improvement of 9.4 per cent on 2006. Mr Grech said: “This is the result of increased market shares and adherence to strict underwriting controls coupled with the management of expenses”.
The remained subject to taxation in the territories where business is underwritten. The provision for taxation of €2.4 million (Lm1.03m) for the financial year 2007 significantly impacted the post-tax profit of €6.91million (Lm2.97m), which reflected a reduction of 7.95 per cent over 2006. Dissimilarity between the tax charge for these years also reflected a one-time favourable adjustment carried in 2006.
At the group’s AGM last Friday, the Middlesea board recommended a final dividend to shareholders of €0.1281 (Lm0.055) per share, amounting to €3.2million (Lm1.38m) an increase of 22.2 per cent over the 2006 distribution.
The Board of Directors also proposed an increase in the authorised and paid up value of each share in issue from €0.582343 (the euro equivalent of the current value of Lm0.25) to €0.60. This increase would be funded through the capitalisation of distributable reserves amounting to €441,425.
The Executive Chairman stated that shareholders’ funds increased by 5 per cent to €82.6million (Lm35.5m) at the end of 2007. This was in line with the company’s commitment to its shareholders to maximize the value of their investment over time. The net asset value per €0.582343 (Lm0.25) share was strengthened further to €3.3 (Lm1.42).
In line with the Group’s growth strategy, the Gross written premium (excluding individual life) from Malta, Italy and Gibraltar for the financial year 2007 showed a record increase of 24.3 per cent over the previous year. The total premium generated amounted to €104.2million (Lm44.7m). The general insurance business result continued to benefit from a favourable run-off in loss reserves. This emerged as a consequence of the settlement and re-assessment of the previous year’s claims, which reflected the prudent approach to claims reserving and the Group’s focus on claims management following developments in available technical information. This efficiency in claims handling, coupled with the Group’s continuous focus on disciplined underwriting criteria and strict cost control, yielded an increase of 15.5 per cent in the technical results amounting to €6.96million (Lm2.99m).