Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Tower 1H profit sinks 70% on year-earlier asset sales

Tower first-half profit sinks 70% as 2013 asset sale gains wash through

By Paul McBeth

May. 27 (BusinessDesk) - Tower, which sold its health, life, and investment units to focus on general insurance, reported a 70 percent slide in first-half earnings, reflecting gains from asset sales a year earlier that weren't repeated.

Net profit dropped to $13.1 million in the six months ended March 31, from $44.2 million a year earlier, the Auckland-based company said in a statement. Tower's continuing operations, which exclude the asset sale gains and remnant life insurance business, made a profit of $10 million, or 4.96 cents per share, turning from a loss of $9.4 million, or 3.5 cents a year earlier, when it increased earthquake provisioning.

Gross written premium revenue rose 5 percent to $139.2 million as rates were driven up by higher reinsurance costs, and total revenue gained 5.6 percent to $148.4 million.The company didn't provide a forecast.

"The result was solid and an indication of the underlying strength of the general insurance business, which had been impacted during the period by a number of severe weather events," chairman Michael Stiassny said. "Tower has made good progress against its key metrics and strategic priorities, and is well advanced in the execution of its core strategy to deliver growth and sustainable shareholder returns."

Tower returned $171.8 million through a voluntary share buyback over the past 13 months after selling various businesses as part of former cornerstone shareholder Guinness Peat Group's exit from the insurer. It retained some life insurance business, which is still for sale and valued at $39.1 million, and is considering potential suitors for the unit.

The board declared an interim dividend of 6.5 cents per share, payable on June 30 with a June 13 record date, up from 5 cents a year earlier.

The shares were unchanged at $1.71 yesterday, and have declined 2.3 percent this year. The stock is rated an average 'hold' based on four analyst recommendations compiled by Reuters, with a median target price of $1.78.

Tower today announced a share cancellation for investors with fewer than 200 shares without incurring brokerage to let small shareholders dispose of their holdings.

The insurer said abnormal weather patterns, including flooding in New Zealand's South Island and,Cyclone Lusi, lifted the cost of large claim events to $4.8 million from $3.3 million a year earlier, and that weather events remain a concern for the rest of the year.

Tower anticipates completing all of its Canterbury earthquake related claims by the end of 2015, having settled 81 percent of its cases. It increased the claims provision by $22.1 million in the period, which are all covered by reinsurance.

The company extended its earthquake reinsurance cover to $585 million with a retention of $10 million, which it said lowered its long-term risk profile.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news