Middlesea Group posts Lm2.2m pre-tax profit

Middlesea Group has registered a pre-tax operating profit on ordinary activities of Lm2.21 million for 2004, as against Lm1.38 million a year before.

In view of this strong performance, and consonant with Middlesea' dividend policy, the board of directors is recommending the payment of a final dividend of 6c per share, totalling Lm750,000; an increase of 20 per cent over last year.

Gross premiums written last year amounted to Lm35.94 million (€82.7m). Shareholders' funds (including MSI's share of the embedded value in Middlesea Valletta Life) grew to Lm24.07 million (€55.4m). The net asset value per share was Lm1.93 and the earnings per share increased by 49 per cent to 12c7. Total group assets increased by almost seven per cent to Lm100.2 million (€230.6m).

In Italy, Progress Assicurazioni SpA continued to pursue a policy of adequate pricing and reserving within a territorial spread and portfolio mix between motor and non-motor business. In line with its consolidation policy, gross premium written, generated through a network of agents operating in southern Italy and Sicily, amounted to Lm21.66 million (€49.8m). After consolidation adjustments and adoption of MSI's accounting policies, a contribution before tax of Lm0.31 million (€0.7m) was made to the Middlesea Group.

Middlesea Group chairman Mario Grech announced that Middlesea Insurance plc, which held a 51 per cent shareholding in Progress since 2000, reached an agreement with Corporación Mapfre to acquire their 38.97 per cent holding in Progress Assicurazioni SpA, which transaction would be concluded this year. The financing of this specific investment would be attained through a long term arrangement at competitive terms with a leading local financial institution.

In its 10th year of operation, Middlesea Valletta Life Assurance Company Ltd (MSV) contributed positively to the group's overall result with the total profit after tax increasing from Lm1.3 million to Lm1.5 million (€3.5m).

The group's total investments, excluding its share in MSV, amounted to Lm58.06 million (€133.6m) and investment income (excluding unrealised capital gains and share of MSV's profits) after investment expenses and charges amounted to Lm1.5 million (€3.5m). In addition to this income, the portfolio recorded an unrealised capital appreciation originating both from the local and foreign markets and this had a positive effect on the reserves of the group.

Mr Grech said the board of directors was actively pursuing changes to the group's accounting policies in accordance with updates in the International Financial Reporting Standards (IFRSs) which became effective on January 1 this year.

Mr Grech concluded: "Over recent years, the insurance sector has experienced a phenomenon whereby limited opportunities precluded insurers from obtaining acceptable results. Our professional discipline has helped us to achieve our operational projections for the year, in highly competitive markets.

Our consistent strategy will continue to be focused on providing a broad range of products through multi-channel distribution, applying technically correct pricing, ensuring adequate reserving and pursuing growth with a territorial spread and portfolio mix. We will continue to employ an efficient capital structure through the allocation of our shareholder equity across the Middlesea Group with the ultimate aim of maximising our potential for profitable growth".