E-L Financial Corporation Limited Announces June 30, 2012 Interim Financial Results
August 09 2012 - 1:25PM
Marketwired Canada
E-L Financial Corporation Limited ("E-L Financial")
(TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) today reported that for the
quarter ended June 30, 2012, consolidated net operating income(1) of $49.2
million or $11.48 per share(2) compared with $23.1 million or $5.23 per share in
2011.
The $26.1 million increase in net operating income for the second quarter of
2012 versus 2011 is principally attributable to a $23.9 million increase in net
operating income for the general insurance operation ("The Dominion"). Better
underwriting results driven by favourable prior year claims development recorded
in the second quarter of 2012 for automobile accident benefits claims and lower
claims expense for catastrophe losses contributed to The Dominion's increase.
Net operating income for the life insurance operation ("Empire Life") improved
$2.8 million primarily due to the favourable impact of changes made to the asset
mix to improve the matching of long term liabilities in the Individual Insurance
product line.
Consolidated net operating income for the first six months of 2012 was $94.2
million or $22.28 per share compared with $48.2 million or $10.97 per share for
the same period in 2011. The $46.0 million increase in net operating income was
primarily due to a $35.9 million increase in The Dominion's net operating income
for the reasons noted above, combined with lower weather-related property
losses. Empire Life's net operating income increased $6.8 million primarily due
to the favourable impact of changes made to the asset mix.
Net income (loss)
E-L Financial earned consolidated net income of $28.5 million or $6.21 per share
for the second quarter of 2012 compared with a loss of $11.4 million or $3.53
per share in 2011. Net income was favourably impacted by the increase in net
operating income, described above, and a $19.7 million decline in the Company's
share of losses from associates, partially offset by a $6.0 million increase in
E-L Corporate's fair value through profit or loss ("FVTPL") investment losses.
Consolidated net income for the first six months of 2012 was $184.2 million or
$45.20 per share compared with $38.8 million or $8.58 per share in 2011. The
$145.4 million increase in net income for the period reflects a $58.2 million
increase in net income from E-L Corporate's FVTPL investments resulting from
favourable market returns, a $43.9 million increase in the Company's share of
income from associates and The Dominion's $35.9 million improvement in net
operating income.
Comprehensive income (loss)
E-L Financial earned consolidated comprehensive income of $11.7 million or $1.95
per share for the second quarter of 2012 compared with a loss of $10.8 million
or $3.38 per share in 2011. Consolidated other comprehensive loss ("OCL") was
$16.7 million for the second quarter of 2012 compared with other comprehensive
income ("OCI") of $0.6 million in 2011. The $17.3 million decline in OCI for the
quarter reflected a larger decline in the unrealized fair value of available for
sale investments compared to the prior period.
Consolidated comprehensive income for the first six months of 2012 was $180.3
million or $44.21 per share compared with $35.0 million or $7.62 per share in
2011. Consolidated OCL was $3.9 million for the first six months of 2012
compared with $3.8 million in 2011.
"Macroeconomic headwinds continue to effect the life insurance business, while
our general insurance operation benefits from Ontario auto reforms and this
showed through in our underwriting results. Equity markets got off to a strong
start early in the year but pulled back during the last quarter and dampened
results at the corporate level", said Duncan Jackman, Chairman, President and
CEO of E-L Financial.
CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------------------------------------------
Three months ended June 30, 2012
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(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 3,463 $ 33,013 $ 12,738 $ 49,214
Realized gain on
available for sale
investments including
impairment write downs 1,947 8,521 1,208 11,676
Share of loss of
associates (4,484) - - (4,484)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (27,924) (27,924)
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Net (loss) income (26,998) 41,534 13,946 28,482
Other comprehensive
loss (5,950) (9,264) (1,530) (16,744)
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Comprehensive (loss)
income $ (32,948) $ 32,270 $ 12,416 $ 11,738
-----------------------------------------------------
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Three months ended June 30, 2011
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 4,036 $ 9,090 $ 9,970 $ 23,096
Realized gain on
available for sale
investments including
impairment write downs 3,180 5,113 3,283 11,576
Share of loss of
associates (24,170) - - (24,170)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (21,876) (21,876)
----------------------------------------------------------------------------
Net (loss) income (38,830) 14,203 13,253 (11,374)
Other comprehensive
(loss) income (20) 6,738 (6,120) 598
----------------------------------------------------------------------------
Comprehensive (loss)
income $ (38,850) $ 20,941 $ 7,133 $ (10,776)
-----------------------------------------------------
----------------------------------------------------------------------------
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Six months ended June 30, 2012
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 10,690 $ 58,335 $ 25,131 $ 94,156
Realized gain on
available for sale
investments including
impairment write downs 2,475 15,620 2,693 20,788
Share of income of
associates 26,886 - - 26,886
E-L Corporate's fair
value change in fair
value through profit
or loss investments 42,380 42,380
----------------------------------------------------------------------------
Net income 82,431 73,955 27,824 184,210
Other comprehensive
income (loss) 2,486 (3,863) (2,514) (3,891)
----------------------------------------------------------------------------
Comprehensive income $ 84,917 $ 70,092 $ 25,310 $ 180,319
-----------------------------------------------------
----------------------------------------------------------------------------
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Six months ended June 30, 2011
-----------------------------------------------------
(thousands of dollars) E-L Corporate The Dominion Empire Life Total
----------------------------------------------------------------------------
Net operating income $ 7,344 $ 22,479 $ 18,357 $ 48,180
Realized gain on
available for sale
investments including
impairment write downs 4,305 13,140 6,061 23,506
Share of loss of
associates (17,028) - - (17,028)
E-L Corporate's fair
value change in fair
value through profit
or loss investments (15,858) - - (15,858)
----------------------------------------------------------------------------
Net (loss) income (21,237) 35,619 24,418 38,800
Other comprehensive
(loss) income (2,607) 1,827 (2,998) (3,778)
----------------------------------------------------------------------------
Comprehensive (loss)
income $ (23,844) $ 37,446 $ 21,420 $ 35,022
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(1) Use of non-GAAP measures:
"net operating income" is net income excluding realized gain on available
for sale investments including impairment write downs, the Company's share
of income from associates and the fair value change in fair value through
profit or loss investments in the E-L Corporate portfolio, all net of tax.
The term net operating income does not have any standardized meaning
according to GAAP and therefore may not be comparable to similar measures
presented by other companies.
(2) All earnings per share figures are net of dividends paid on First
Preference shares.
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