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

 

Trade Agreements: TPP Minus US Starting To Gain Ground

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the US after the election of president Donald Trump. More>>

ALSO:

PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said. "Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year". More>>

ALSO:

Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

New Zealand workers pay the second smallest portion of their income to the government among developed nations and less than half the average ratio of their Organisation for Economic Cooperation and Development peers. More>>

ALSO:

Cyclone Cook: Round Up Of This Week’s Weather

One of the significant impacts this week was flooding due to excessive rainfall amounts. Rainfall amounts topped out at 350mm over the past 60 hours in parts of northwest Nelson, with 200mm+ measurements recorded about Coromandel Peninsula, and between 150-200mm in the Kaimai Ranges. Rainfall amounts of between 30-50mm were commonplace elsewhere. More>>

ALSO:

Earlier: Batten Down The Hatches For Cyclone Cook

Although fast-moving, Cyclone Cook will be destructive and MetService Expert Meteorologists have issued Severe Wind Warnings for the whole of the North Island apart from Northland... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news