MSI registers modest €3.4 million profit after Progress debacle

In a company announcement at the MSI yesterday by company secretary Carlo Farrugia, the Board of Directors did not recommend payment of an interim dividend.

However, MSI has de-recognised Progress as a subsidiary with effect from 1 January 2009, hence the company’s financial results for 2009 have been restated.

The insurance company has however declared that it had now refocused its strategy on local operations.

The technical profit of MSI plc as a stand-alone company for the June 2010 period totalled €1.33 million as against €1.53 million during the same period in 2009.

MSI registered a slight increase of 3.2% in premia in the first six months of 2010 when compared to last year’s premia written both in Malta and Gibraltar.

Moreover, the company’s gross technical reserves rose by 7.4% in the first six months of 2010 when compared to the same period last year.

During the first six months of 2010, associate company Middle Sea Valletta Life Assurance Co. Ltd registered a profit of €2.6 million after tax when compared to a loss of €0.3 million during the same period last year.

MSV registered a significant rise in premia written from €50.11 million in the first six months of 2009 to €74.19 million written during the first half of 2010, a rise of €24.8 million.

The associate company’s investment portfolio has now exceeded €992 million.

Subsidiary International Insurance Management Services (IIMS’s) registered a profit of €0.26 million during the first six months of 2010, when compared to a profit of €0.24 million during the same period last year.

Fee income by IIMS’s increased slightly by €0.02 million from €0.98 million during the first six months of 2009 to €1.0 million during the first six months of this year.

With effect from July 2010, this subsidiary company’s operations have been focused solely on its non-group clients. In fact, both MSI and VFA have re-integrated with the respective companies the services previously performed by IIMS. IIMS’s international client base now forms 23% of its revenue.

The holding company generated a result of €1.33 million during the first six months of 2010 as against €1.53 in the previous half-yearly result, a loss of €0.20 when compared to the same period last year.

Hence during the first six months of 2010, MSI group’s total half-yearly result for 2010 amounted to a profit of €3.2 million as against a loss after tax of €19 million.

In its outlook for the second half of the year, the Board of Directors explained how it would continue to seek growth in profitability and market share over the coming month, in line with the company’s new strategy of focus on the Maltese insurance market.

“Despite the very keen competition on the Maltese insurance market, we look forward to the further consolidation of Middlesea Insurance as the leading provider to the local insurance market,” the company’s board of directors pledged in its statement.

“We look forward to the next half of the year with cautious optimism, as we seek to provide sustainable results in a market which is cyclical and dependent on the risks necessarily associated with the business of insurance,” they concluded.