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

 

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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