Sampo released, again, a strong set of results and part of it is due to the studious If. The rest is highly attributable to better investment performance yoy. Some doubts remain after the Nordea exit but, until then, investors should be rewarded with lucrative distributions.
Companies: Sampo Oyj Class A
Sampo’s Q1 results has surprised the insurance world, beating expectations. However, although the insurer has reported a great performance, this looks as if it will not last and does not address the company’s main issues: lack of growth opportunities in its market, few ideas to expand further and Nordea’s planned exit progressively decreasing the remittance rate.
Hence, although this quarter has been great, it will have a limited impact on the full-year performance as such in that it is expecte
The net result of Sampo was hit by its decision to impair the book value of the Nordea shares from €8.90/share to €7.50/share. The negative impact on the bottom line amounted to €899m and the result stood only at €112m. The profit before tax was stood at €380m, with a positive performance from If P&C (up 1.91% to €901m). The Board will propose a distribution of €1.70/share. 2021 should record a better performance with a return to historic levels of profitability.
Sampo is under pressure by Elliott, the activist investor, to focus on the insurance business and to sell its stake in Nordea. This step could be accomplished in the medium term as it involves two of the most important financial institutions in the Nordic markets. In addition, Sampo needs another source of internal dividend generation, the finding of which is not evident in the region.
Sampo is rapidly implementing deep changes to its business mix and strategic orientations. The insurer has sold Nordea’s shares for €1,174m, has acquired a Non-Life British company (Hastings Group) and reduced its financial leverage through debt repurchases. 2020 is the perfect year to book losses and to prepare for a more dynamic future. We expect corporate operations outside the Nordic region, focused on the preferred P&C segment.
Sampo posted H1 20 earnings reaching €569m, -42% yoy. The decline came from the investment side, while the insurance business showed high resilience. The group’s solvency ratio stood at 187%. The insurer has also confirmed its intention to acquire 70% of Hastings Group Holdings with the South African RMI through a newly-formed jointly-owned company. The size of the Sampo’s investment should be €1.29bn, of which €1bn funded by newly-issued hybrid Tier 2 capital. Our estimates will be improved.
The Finnish insurance group Sampo is exploring an entry into the UK market with a potential bid for the Non-Life insurer Hastings Group Holdings. The operation is being prepared with Hastings’s biggest shareholder, Rand Merchant Investment Holdings. Through such an acquisition, Sampo will be able to diversify its earnings, currently coming exclusively from the Nordic countries, and boost its growth. This is also a sign that the impact of the pandemic on its figures is lower than expected.
Sampo announced a Q1 20 pre-tax profit of €162m, -65.9% yoy. Mandatum Life recorded a loss of €-16m, while If P&C was resilient but its earnings declined by 34.8% to €129m. The impact of COVID-19 was significant on claims but revenues recorded growth. To preserve its capital position, the Board decided to propose a lower dividend for shareholders, at €1.5/share vs. €2.2 initially. This will allow a Solvency II ratio of 187% to be reached by the end of April 2020.
A calm end pf the year for Sampo. The insurer posted an annual profit before tax of €1,541m, -26% yoy and broadly in line with estimates. The revised dividend strategy, with higher payout ratio at 70%, does not mean higher cash for shareholders. It is the way to rebalance the decrease in net profit with a lower contribution from Nordea. Now, the dividend distribution capacity depends on If P&C. A situation comparable to the pre-2015 period.
Sampo has posted a 9M 17 profit before tax of €1,073m, down 35% yoy (€92m in Q3 19, -81% relative to Q3 18). This decline is caused by the low interest rates that affected the performance of Nordea and Topdanmark. Mandatum Life’s figures should be adjusted by the exceptional €197m contribution from the cooperation agreement with Danske Bank in 2018. The insurer will be less generous with its shareholders in 2019. Our model will be revised down.
A positive set of H1 19 figures. The company performed well in both the Life and P&C businesses, which recorded respective pre-tax earnings of €137m and €440m. The performance of the Life branch needs to be seen within the context of a €197m exceptional in the H1 18 coming from the cooperation agreement with Danske Bank. We have recently adjusted our model to factor in a lower dividend stream from Nordea. No significant change is expected in our positive opinion.
Sampo will distribute one Nordea share for each ten Sampo shares held as an extra dividend. This decision aims to decrease the insurer’s stake in the bank below 20% to benefit from more favourable regulation in terms of the Solvency II. This move will not have a significant impact on the internal dividend stream and Sampo would be able to distribute a strong dividend.
Sampo repoted a Q1 19 profit before tax of €475m, up 6.7% yoy. P&C’s pre-tax profit increased by 2.6% to €198m, while the Life business posted a pre-tax profit of €72m. The Solvency ratio declined to 130%, hit by higher capital requirements on Nordea. The bank’s contribution to earnings dropped significantly to €83m. However, Topdanmark’s exceeded 19%. Sampo announced that it would make a decision concerning its capital position before the end of the year. Our model will be refined.
Sampo posted an annual profit before tax of €2,094m (-15.6% yoy). If we take into consideration the FY 17 non-recurring item of €706m, the pre-tax profit recorded a 17.9% increase. The insurer succeeded in offering a more balanced earnings structure, with a lower contribution from the If P&C arm. The dividend stream from Nordea and Topdanmark is estimated at €677m in 2019. We appreciate the insurer’s performance and our estimates will be revised up.
Sampo posted a 9M adjusted profit before tax of €1,643m. All business lines posted growth. The profitability of the Life business remains extremely sensitive to interest rate movements, and lower additional technical reserves allowed the offsetting of the drop in investment income. The P&C operations remained resilient with an expected sustainable dividend stream to the group. The money-laundering affairs of Nordea and Danske Bank are not good news and should be a concern, but our positive opini
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