Argo Group International Holdings, Ltd (AGIIL) has reported a 20.15 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $32.90 million, or $1.07 a share in the quarter, compared with $41.20 million, or $1.31 a share for the same period last year. On an adjusted basis, operating earnings per share were at $0.65 for the quarter compared with $0.78 in the same period last year.
Revenue during the quarter grew 8.57 percent to $405.40 million from $373.40 million in the previous year period. Net premium earned for the quarter increased 4.92 percent or $17 million to $362.30 million.
Total expenses move up
Operating income for the quarter was $38 million, compared with $34.30 million in the previous year period. However, the adjusted operating income for the quarter stood at $19.80 million compared to $24.50 million in the prior year period. At the same time, adjusted operating margin contracted 168 basis points in the quarter to 4.88 percent from 6.56 percent in the last year period.
Meanwhile, income from fees and commission for the quarter was stable at $4.30 million, when compared with the previous year period. The company has recorded a gain on investments of $13.30 million in the quarter compared with a gain of $3.70 million for the previous year period.
"Argo Group ended the year with book value of $59.73 per share, a 10% increase from December 31, 2015, even with an increase in the incidence of global catastrophe losses relative to recent years," said Argo Group chief executive officer Mark E. Watson III. "For the past 15 years, Argo Group has grown book value per share in excess of 10% on a compounded annual basis. As we have discussed in the past, we consider the compounded annual growth in book value as the measure that most clearly demonstrates value creation for our shareholders. Also, our annualized return on equity has averaged 9.8% over the last four years. These results demonstrate the value of a well-balanced and diverse portfolio of businesses as well as thoughtful asset allocation. The recently completed acquisition of Ariel Re provides us with additional presence and scale in both our Bermuda and London based operations," said Mr. Watson.
Liabilities outpace assets growth
Total assets increased 8.74 percent or $579.40 million to $7,205 million on Dec. 31, 2016. On the other hand, total liabilities were at $5,412.30 million as on Dec. 31, 2016, up 9.17 percent or $454.80 million from year-ago. Return on assets stood at 0.53 percent in the quarter, down 0.17 from 0.69 percent in the last year period. At the same time, return on equity was at 1.84 percent in the quarter, down 0.63 from 2.47 percent in the last year period.
Investments move up
Investments stood at $4,324.30 million as on Dec. 31, 2016, up 5.07 percent or $208.60 million from year-ago. Meanwhile, reinsurance recoverables moved up 20.73 percent or $52 million over the year to $302.80 million on Dec. 31, 2016.
Total debt was almost stable over the past one year at $367.60 million on Dec. 31, 2016. Shareholders equity stood at $1,792.70 million as on Dec. 31, 2016, up 7.47 percent or $124.60 million from year-ago. As a result, debt to equity ratio went down 2 basis points to 0.21 percent in the quarter from 0.22 percent in the last year period.
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