Middlesea Insurance plc published its Preliminary Statement of Results for the year ended 31 December 2006 following a Board of Directors’ meeting held on 26 April 2007.
Total gross premiums written by the Middlesea Group during 2006 increased by 6.4% to Lm36 million. The balance on the Group’s technical accounts dropped by 43% to Lm2.6 million (2005: Lm4.5 million). On the other hand, the share of profits from the Group’s investment in Middlesea Valletta Life Assurance Co. Ltd. increased by another 28.5% to a record contribution of Lm1.5 million. Total business written by Middlesea Valletta Life Assurance Co. Ltd. amounted to Lm50.4 million in 2006 as the demand for life insurance and investment related products in Malta increased substantially.
Total income from insurance activities during 2006 amounted to Lm4.1 million, representing a 28.4% decline from the record levels in the previous year. However it is worth noting that income from insurance activities in 2006 is 18% above that registered in 2004. Meanwhile net investment income declined by 44% to Lm2.4 million (2005: Lm4.4 million). Whilst other investment income dropped by 37% to Lm3.1 million, investment expenses and charges including fair value losses increased by 9.4% to Lm0.7 million. Other income generated by the Group companies was generally unchanged at Lm0.6 million whilst administrative expenses rose by 13.6% to Lm1.5 million.
The Middlesea Group registered a pre-tax profit of Lm3.7 million in 2006, 43.9% below the record profitability in the previous year. The Group incurred a tax charge of Lm0.4 million representing a marginal tax rate of only 11.9% compared to 25.4% in 2005. After accounting for a small profit attributable to minority interests, the Group’s profit for the year of Lm3.2 million represents a 34% drop from the previous year with earnings per share of 12c7 compared to the 2005 earnings of 19c3 (adjusted to take account of the 2 for 1 share split in June 2006).
The Directors have recommended the payment of a gross ordinary dividend of 4c5 per share to all shareholders on the Company’s register as at close of trading on Wednesday 23 May 2007. Last year, Middlesea Insurance paid an ordinary dividend of 3c5 gross per share as well as a special dividend of 1c5 per share which was distributed to commemorate the Company’s 25th Anniversary resulting in a total gross dividend of 5c per share. Similar to previous years, this dividend is being paid out of an untaxed account and shareholders are subject to a 15% final withholding tax upon distribution.
The Group’s balance sheet shows total assets of Lm118.2 million as at 31 December 2006, an increase of 9% from the previous year with shareholders’ funds (including minority interests) of Lm35 million (2005: Lm31.9 million) giving a net asset value per share of Lm1.40. The Group’s total gross technical reserves increased by a further 8% to Lm65.4 million.