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Company Announcement Issued 23 July, 2015

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The Board of Directors of Mapfre Middlesea p.l.c., have today the 22 July 2015, considered and approved the unaudited financial statements of the Group for the financial half year ended 30 June 2015. A preliminary statement of interim results is being attached herewith in terms of the Listing Rules. The Interim Financial Statements are available for viewing on the Company’s website at www.middlesea.com.

In line with Company policy, the Board of Directors does not propose the payment of an interim dividend.

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By Order of the Board

Carlo Farrugia

Company Secretary

Review of Group Operations

Half Yearly Financial Statements - 30 June 2015

Commentary

The Directors present the unaudited consolidated interim results of MAPFRE Middlesea p.l.c..

The consolidated MAPFRE Middlesea Group result for the first six months of 2015 amounted to a profit before tax of €15.18 million, compared to €8.21 million registered during the comparative period last year. The profit after tax allocated to shareholders amounted to €5.27 million as compared to €3.09 million in 2014. All Group companies registered improved results with the main driver being the Group’s life operations with MSV Life p.l.c. registering higher profits than the comparative period last year mainly resulting from a one-off saving from renegotiation of the reinsurance treaty . The general business returned a satisfactory result in an increasingly competitive market.

The Group’s gross premiums written have increased by 49.4% during the first six month of 2015. The General Business turnover continued to register important growth in excess of market performance with an increase of 15.1%. The competive environment we operate in and the price pressures to maintain or acquire business makes this growth rate a significant one. Life premiums written increased by 58.8% thus having the major impact on the increased volume of business of the Group.

Following an outstanding performance during the initial months of the year, worries about the Greek debt default caused markets to retract sharply during the last two months. Bond yields have returned to the levels as at the end of 2014 following the downturns experienced earlier in the year. Notwithstanding this, the investment portfolios registered higher returns when compared to June 2014 particularly those of MSV Life p.l.c.. The positive performance of the MSE Index, during the period, resulted in positive movements on the Holding Company portfolio which had registered losses during the same period in 2014.

The Group continues to enjoy a healthy Solvency position as a result of the attained positive results.

Financial highlights for the half year

  • General Business Gross Premium written increased by 15.09% from €18.13 million in 2014 to €20.86 million as at the 30 June 2015.
  • Long term Gross Premium Written by the Group increased by 58.81% to €105.20 million compared to €66.24 million in the comparative period in 2014.
  • Return from Investments allocated to the non-technical account for the six months to 30 June 2015 amounted to a gain of €1.04 million compared to €2.98 million in 2014.
  • The Group registered a Profit after taxation for the 6 months ended 30 June 2015 of €9.77 million, of which €5.27 million attributable to shareholders, compared with a profit after taxation of €5.93 million for the same period last year of which €3.09 million attributable to shareholders.
  • Gross Technical Provisions at 30 June 2015 increased by 7.98% to €1.55 billion over the 31 December 2014 reserves of €1.44 billion. Net of reinsurers’ share, technical provisions stand at €1.54 billion, an increase of 8.09% over the 31 December 2014 provisions of €1.43 billion.
  • Total assets increased by 7.50% and totaled €1.75 billion as at 30 June 2015, as compared to the total assets of €1.63 billion at 31 December 2014.
  • Total Equity of the Group attributable to shareholders amounted to €81.23 million as at 30 June 2015, up from €80.13 million at 31 December 2014 with a net asset value per share of €0.88.
  • The Group is compliant with the regulatory solvency requirements both for the long-term and general business. Mapfre Middlesea p.l.c.’s solvency position as at the 30 June 2015 on its general business stood at 391% of the minimum solvency requirement (31 December 2014 – 484%) following the payment of the dividend for Financial year 2014 and an increase in the required minimum margin derived from increased business.

Outlook

With the growth being registered and improved bottom-line performances, the Group, whilst remaining vigilant, is confident in achieving its targets for the year. The portfolio transfer as a going concern from Allcare Insurance Limited which is being finalised and that is subject to MFSA approval will increase the market share of the Company leading to optimisation of available capital. Focus will remain on the customer experience offering products that are innovative in the market and tapping into clients increasing needs. This is pursued with the constant commitment in delivering improved returns to shareholders through strategies aimed at enhancing technical performance and cost efficiencies.

In line with Company policy, the Board of Directors do not propose to pay an interim dividend for the half year ended 30 June 2015 (2014 – nil).

Notes to the Condensed Financial Statements

For the half year ended 30 June 2015

  1. MAPFRE Middlesea p.l.c. is authorized by the Malta Financial Services Authority to carry on long term and general business of insurance under the Insurance Business Act, 1998.
  1. Basis of preparation

These condensed financial statements are being published in accordance with Chapter 5 of the Listing Rules of the Listing Authority – Malta Financial Services Authority and the Prevention of Financial Markets Abuse Act 2005. These statements have been extracted from the Group’s unaudited financial statements as approved by the Board on 22 July 2015 and have been prepared in accordance with International Financial Reporting Standards as adopted by the EU applicable to interim financial reporting (IAS34). They do not include all information required for full annual financial statements, and should be read in conjunction with the financial statements for the year ended 31 December 2014. The accounting policies applied in these condensed financial statements are the same as those applied by the group in its financial statements for the year ended 31 December 2014.

Related party transactions with other members of the Mapfre Middlesea Group were at a similar level to the comparable period.

Segmental information

The Group is organized into three geographic segments: Malta, Gibraltar and London. Whilst the Malta segment is involved in general business and long term business, the Gibraltar and London segments are general business segments that are in run-off.

Statement pursuant to Listing Rule 5.75.3 issued by the Listing Authority

We confirm that to the best of our knowledge:

  • the condensed interim financial statements for the Group give a true and fair view of the financial position as at 30 June 2015, financial performance and cash flows for the period then ended, in accordance with accounting standards adopted for use in the EU for interim financial statements ( IAS 34 ‘ Interim Financial Reporting’) for the Group; and
  • the commentary includes a fair review of the information required in terms of Listing rule 5.75.2.

Martin Galea Charles Borg Alfredo Munoz Perez
Chairman Director President & CEO

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