MiddleSea makes €20.6m loss

The MiddleSea Group said today it made a loss of of €20.6m after taxation in the year which ended on December 31.

It said the crisis in the world financial markets and the performance of its Italian subsidiary were the factors which broke its 27 year history of positive financial results. It had made a profit of €6.9m in 2007.

Mario C. Grech, Executive Chairman, said that the group’s focus on the strength of the balance sheet over the years had helped it to absorb this loss in 2008, whilst at the same time retaining a strong balance sheet. All the regulated companies within the group adequately satisfied the statutory and regulatory solvency margins – with Middlesea Insurance plc holding a 250% solvency cover.

Mr Grech reported that the group’s investment strategy of preserving capital security whilst maintaining liquidity and maximizing returns continued to apply throughout the group. This strategy had contributed towards the containment of fair value losses incurred during the year. However, the group followed the fortunes of the financial sector, and, due to the unprecedented downturn of the local and international investments in equity markets, the Group registered capital losses of €14.7m during the year.

These losses were partly offset by capital gains on the portfolio of fixed income securities of €2.6m. He reiterated that none of the companies within the group held any exposures to those toxic assets which were one of the root causes of the current financial crisis. Furthermore, the Italian subsidiary Progress Assicurazioni SpA, registered a post tax loss of €19.1m.

Whilst these two sources of revenue produced disappointing results in 2008, Mr Grech said that Middlesea Insurance plc, the holding company, had maintained a satisfactory positive technical result of €1.78m from its insurance operations in Malta and Gibraltar.

The associated company Middlesea Valletta Life Assurance Co Ltd and the subsidiary International Insurance Management Services Ltd both contributed positive results to the group during 2008.

The Board of Directors will not be recommending the payment of a dividend to shareholders.