GHL’S GROUP PROFITS SOAR

The published increase in profits by Guardian Holdings Limited (GHL) for the 2004 financial year is an indicator both of customer confidence in the corporation and in the continued strengthening of the country’s non-oil sector and the overall national economy. The year-end results for 2004 published on Friday show that the GHL Group’s operating profits increased by 52 percent, rising to $831.7 million from the December 31, 2003 figure of $545.6 million. The figures would have included profits made from GHL’s shareholding interest in RBTT, nonetheless, they are significant because they were recorded, as Arthur Lok Jack in his Chairman’s report stated, “despite the substantial losses incurred as a result of the damage wrought by four hurricanes in various territories of the Caribbean and Florida in which our general insurance subsidiaries write business.”

But while the losses would have been reduced somewhat through re-insurance, returns on investment clearly would have been immensely higher had Hurricane Ivan and the other three hurricanes not whittled down what otherwise would have been more favourable net corporate profits. Lok Jack has quantified the losses with their “consequential impact on cash flow” as amounting to 77 cents per share. In spite of this, however, GHL Chairman Lok Jack announced that “total revenue in the General Insurance sub-group rose by 66 percent from $632 million in 2003 to $1,050 million last year, while total revenue in the life, health and pensions sub-group increased by $1,456 million to $1,650 million.” The group’s total assets “grew by 19 percent to $13.8 billion US$2.2 billion” or an increase of “20 percent in investments and growth of 18 percent in insurance funds.”

Lok Jack has stressed, though, that group revenues were higher last year “due mainly to the acquisition of the Link Insurance group in the United Kingdom and Gibraltar” in 2003. Meanwhile, the acquisition of the UK Link Insurance group in addition to a strategic alliance in the UK with Royal Skandia and GHL’s general insurance business in Florida is a demonstration that Guardian Holdings Limited, continues to see itself, as an international company operating in the Caribbean. If, prior to two decades ago, there had been virtually North-South investment and Canadian and United Kingdom insurance majors doing business in Trinidad and Tobago and the Caribbean, GHL and C L Financial, two holding companies, along with others, have reversed the trend.

Guardian Holdings Limited’s strategic alliance with RBTT and C L Financial’s with Republic Bank Limited have meant not only increased revenues for the four financial institutions, but additional revenues as well for Trinidad and Tobago and the several other Caribbean countries in which they operate. Meanwhile, the GHL associated companies, inclusive of those in Caribbean countries and Florida which were affected by the four hurricanes, lost $71,863,000 last year as opposed to their having recorded a profit of $108,686,000 in the previous year. The group’s profit attributable to shareholders stood at $583.2 million at the end of 2004 or, as Lok Jack declared, $3.05 a share, up 36 percent from the December 31, 2003 position of $2.25 a share, before non-recurrent items. The effects of last year’s hurricanes notwithstanding, Guardian Holdings, if we are to judge by the overall results of the 2004 financial year, continues to be a key non-energy sector player in Trinidad and Tobago, as it broadens its South-North investment interests.