Notwithstanding a challenging environment, Middlesea Insurance plc posted a nine per cent increase in its pre-tax profits for the year ended December 31, shareholders at 27th annual general meeting were told.
In line with Middlesea's dividend policy of enhancing its balance sheet and ensuring future sustainability, the meeting approved a dividend distribution of a final dividend of €0.1281 (Lm0.05,5) per €0.582343 (25c) share, amounting to €3,202,500 (Lm1,375,000), an increase of 22 per cent over last year. This was the 24th consecutive year that a dividend was declared and distributed.
Mario C. Grech, Middlesea's executive chairman, explained to shareholders that during the previous year's AGM he had reported satisfactory overall results but, at the same time, he had cautioned that future expectations needed to be based on a prudent analytical appreciation.
The inherent uncertain nature of insurance risk business, which was reflected in the cyclical movements both in the investment capital and technical operations, presented a continuous challenge in achieving well defined objectives. The overall group result for the year ended December 31 was a profit before tax of €9.3 million (Lm4 million) that reflected an increase of nine per cent over the corresponding period in 2006.
The holding company, Middlesea Insurance plc, registered a profit before tax of €6.97 million (Lm3 million), a growth of almost eight per cent over the profitability registered in 2006.
The Italian subsidiary company, Progress Assicurazioni SpA, strengthened its position in business growth and, coupled with its continued strict pricing policy, booked a gross premium of €71.28 million (Lm30.6 million) that reflected an increase of 35 per cent over the previous year.
In 2007, Middlesea's associate Middlesea Valletta Life Assurance Company (MSV) persevered in its successful operations through its distribution network with total business written by the company amounting to €135.9 million (Lm58.34 million), an increase of 16 per cent over the previous year.
The demand for life assurance and investment-related products in Malta increased substantially and MSV registered a profit before tax of €7.24 million (Lm3.11 million) that amounted to an increase of almost 11 per cent over the previous year.
However, the higher incidence of income tax expense reduced this improvement and, consequently, MSV share to this year's profit decreased to €2.63 million (Lm1.13 million).
The AGM also passed two extraordinary resolutions authorising the company to buy back its own shares in certain specific circumstances in order to contribute to a stable market and to renominalise and increase the share capital of the company from €0.582343 (25c) share to €0.6 per share through the capitalisation of retained profits.
Mr Grech was re-appointed executive chairman.