Trimmer Guardian Holdings looks to rebound
Trinidad-based Guardian Holdings Limited (GHL) has taken a hit of US$1.2 billion (J$16.5 billion) from its European business, but having written off the loss-making motor-insurer Zenith UK, the insurance conglomerate now says it is well-positioned to grow profits in the current period.
The write-off pushed Guardian into a loss of US$821 million (J$12.2 billion) at yearend December 2009, erasing TT$240 million of profit in 2008.
Revenues were flat at TT$4.03 billion.
Chairman Arthur Lok Jack called the results "unacceptable", but was upbeat on the business prospects this year.
"The message for the future is that now there is nothing to drag down profits," Lok Jack said to shareholders in a statement appended to the earnings report.
"There are no more bad companies within the group. We were dragged down by our investment in the UK, which we got rid of."
GHL's Jamaican subsidiary Guardian Life Limited had a much more prosperous year, reaping J$622.5 million of net profit - a near sixfold increase from J$111 million in 2008 - from improved revenue of J$6.5 billion.
Guardian Life, which manages a J$30-billion portfolio of policyholder's funds, was up to last year run by Earl Moore. He was replaced by Eric Hosin on January 1, 2010.
Lok Jack insists that, absent the hit taken by the company to dispose of Zenith, GHL would have had a strong year.
As a condition of the sale of the business, the conglomerate was instructed by UK regulators to pump £12 million into the business to bring it to minimum solvency standards, representing a charge of TT$947 million.
"The frustrating part of this result," said Lok Jack, "is that it masks the strong earnings power of the rest of our business."