Company to Hold Conference Call at 9:00
a.m. ET on Wednesday, August 1, 2018
Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced
financial results for the second quarter ended June 30, 2018.
Greenlight Re reported a net loss of $37.4 million for the second
quarter of 2018, compared to a net loss of $35.5 million for the
same period in 2017. The loss was primarily driven by a net
investment loss during the period, partially offset by stronger
underwriting performance. The net loss per share for the second
quarter of 2018 was $1.01, compared to a net loss per share of
$0.96 for the same period in 2017.
Fully diluted adjusted book value per share was
$17.38 as of June 30, 2018, compared to $22.64 per share as of June
30, 2017, and $18.35 as of March 31, 2018.
Management Commentary
Simon Burton, Chief Executive Officer of
Greenlight Re, stated, “We are pleased to see our combined ratio at
96.0% for the quarter, marking consecutive quarters of
improved underwriting profitability. Gross written premiums
were lower during the period due to continued work on portfolio
rebalancing. Greenlight is focused on underwriting profitability
while also diversifying our portfolio and the results are beginning
to materialize.”
David Einhorn, Chairman of the Board of
Directors, stated, “The second quarter showed solid execution by
our underwriting team, as the processes and strategies that Simon
and our management team have implemented are beginning to show
results. However, the quarter continued to be challenging for
our value-investing strategy. Our investment portfolio
reported a loss of 3.8% in the second quarter. We remain confident
in our portfolio, as the valuation disconnect on many of our
largest positions has increased despite generally improving
fundamentals.”
Financial and Operating
Highlights
Second Quarter 2018
- Gross written premiums of $142.1 million, a decrease from
$174.9 million in the second quarter of 2017. The
premium decrease was primarily due to the non-renewal of a Florida
homeowner’s quota share contract during the fourth quarter of 2017,
as well as a lower participation in a multi-line casualty contract
and non-renewal of certain professional liability
contracts.
- Ceded premiums were $27.2 million compared to $2.5 million in
the prior year period as the Company continued to cede off a
portion of its non-standard automobile business.
- Net earned premiums were $128.8 million, a decrease from $160.3
million reported in the prior-year period.
- Net investment loss of $40.7 million, compared to a net
investment loss of $39.1 million in the second quarter of
2017.
- Underwriting income of $5.1 million, compared to underwriting
income of $4.8 million in the second quarter of 2017.
- The Company reported a small favorable prior year development
of approximately $0.8 million, primarily due to a favorable change
in estimated attritional catastrophe losses.
- A composite ratio for the quarter of 92.7%, compared to 94.4%
for the prior-year period. The combined ratio for the quarter
was 96.0% compared to 96.9% for the prior-year period.
Six Months Ended June 30, 2018
- Gross written premiums were $317.2 million, a decrease of 14.7%
from $372.1 million reported in the prior year period.
- Net earned premiums were $274.7 million, a decrease of 12.0%
from $312.2 million reported in the prior-year period.
- Net investment loss of $185.9 million, compared to a net
investment loss of $27.5 million reported in the prior-year
period.
- A composite ratio for the six months ended June 30, 2018 of
94.5%, compared to 95.9% for the prior-year period. The
combined ratio for the six months ended June 30, 2018 was 97.3%,
compared to 98.5% for the prior-year period.
Conference Call Details
Greenlight Re will hold a live conference call
to discuss its financial results for the second quarter ended June
30, 2018 on Wednesday, August 1, 2018 at 9:00 a.m. Eastern
time. The conference call title is Greenlight Capital Re,
Ltd. Second Quarter 2018 Earnings Call.
To participate in the Greenlight Capital Re,
Ltd. Second Quarter 2018 Earnings Call, please dial in to the
conference call at:
U.S. toll
freeInternational |
|
1-888-336-71521-412-902-4178 |
|
|
|
Telephone participants may avoid any delays by
pre-registering for the call using the following link to receive a
special dial-in number and PIN.
Conference Call registration link:
http://dpregister.com/10121349
The conference call can also be accessed via webcast at:
https://services.choruscall.com/links/glre180731.html
A telephone replay of the call will be available
from 11:00 a.m. Eastern time on August 1, 2018 until 9:00 a.m.
Eastern time on August 8, 2018. The replay of the call may be
accessed by dialing 1-877-344-7529 (U.S. toll free) or
1-412-317-0088 (international), access code 10121349. An audio file
of the call will also be available on the Company’s website,
www.greenlightre.com.
Regulation GFully diluted adjusted book value
per share is considered a non-GAAP measure and represents basic
adjusted book value per share combined with the impact from
dilution of share based compensation including in-the-money stock
options and RSUs as of any period end. Book value is adjusted
by subtracting the amount of the non-controlling interest in joint
venture from total shareholders’ equity to calculate adjusted book
value. We believe that long term growth in fully diluted
adjusted book value per share is the most relevant measure of our
financial performance because it provides management and investors
a yardstick by which to monitor the shareholder value
generated. In addition, fully diluted adjusted book value per
share may be of benefit to our investors, shareholders and other
interested parties to form a basis of comparison with other
companies within the property and casualty reinsurance
industry.
Net underwriting income (loss) is considered a
non-GAAP financial measure because it excludes items used in the
calculation of net income before taxes under U.S. GAAP. The
measure includes underwriting expenses which are directly related
to underwriting activities as well as an allocation of other
general and administrative expenses. Net underwriting income (loss)
is calculated as net premiums earned, less net loss and loss
adjustment expenses incurred, less, acquisition costs and less
underwriting expenses. The measure excludes, on a recurring basis:
(1) net investment income; (2) any foreign exchange gains or
losses; (3) corporate general and administrative expenses; (4)
other income (expense) not related to underwriting, and (5) income
taxes and income attributable to non-controlling interest. We
exclude net investment income and foreign exchange gains or losses
as we believe these are influenced by market conditions and other
factors not related to underwriting decisions. We exclude corporate
general and administrative expenses because these expenses are
generally fixed and not incremental to or directly related to our
underwriting operations. We believe all of these amounts are
largely independent of our underwriting process and including them
distorts the analysis of trends in our underwriting operations. We
include other income and expense relating to deposit accounted
contracts and industry loss warranty contracts which we believe are
part of our underwriting operations and should be reflected in our
underwriting income (loss). Net underwriting income should
not be viewed as a substitute for U.S. GAAP net income.
Forward-Looking StatementsThis news release
contains forward-looking statements within the meaning of the U.S.
federal securities laws. We intend these forward-looking statements
to be covered by the safe harbor provisions for forward-looking
statements in the U.S. Federal securities laws. These statements
involve risks and uncertainties that could cause actual results to
differ materially from those contained in forward-looking
statements made on behalf of the Company. These risks and
uncertainties include the impact of general economic conditions and
conditions affecting the insurance and reinsurance industry, the
adequacy of our reserves, our ability to assess underwriting risk,
trends in rates for property and casualty insurance and
reinsurance, competition, investment market fluctuations, trends in
insured and paid losses, catastrophes, regulatory and legal
uncertainties and other factors described in our annual report on
Form 10-K filed with the Securities Exchange Commission. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
About Greenlight Capital Re, Ltd.Established in
2004, Greenlight Re (www.greenlightre.com) is a NASDAQ listed
company with specialist property and casualty reinsurance companies
based in the Cayman Islands and Ireland. Greenlight Re
provides risk management products and services to the insurance,
reinsurance and other risk marketplaces. The Company focuses
on delivering risk solutions to clients and brokers by whom
Greenlight Re's expertise, analytics and customer service offerings
are demanded. With an emphasis on deriving superior returns
from both sides of the balance sheet, Greenlight Re manages its
assets according to a value-oriented equity-focused strategy that
supports the goal of long-term growth in book value per share.
Contact:
Investor Relations:Adam PriorThe Equity Group
Inc.(212) 836-9606IR@greenlightre.ky
Public Relations/Media:Mairi MallonRein4ce+44
(0)203 786 1160mairi.mallon@rein4ce.co.uk
GREENLIGHT CAPITAL RE,
LTD.CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30, 2018 and December 31,
2017 (expressed in thousands of U.S. dollars,
except per share and share amounts)
|
June 30, 2018 |
|
December 31, 2017 |
|
(unaudited) |
|
(audited) |
Assets |
|
|
|
Investments |
|
|
|
Debt
instruments, trading, at fair value |
$ |
13,831 |
|
|
$ |
7,180 |
|
Equity
securities, trading, at fair value |
820,493 |
|
|
1,203,672 |
|
Other
investments, at fair value |
69,251 |
|
|
152,132 |
|
Total
investments |
903,575 |
|
|
1,362,984 |
|
Cash and
cash equivalents |
65,441 |
|
|
27,285 |
|
Restricted
cash and cash equivalents |
1,264,941 |
|
|
1,503,813 |
|
Financial
contracts receivable, at fair value |
68,123 |
|
|
12,893 |
|
Reinsurance
balances receivable |
321,873 |
|
|
301,762 |
|
Loss and
loss adjustment expenses recoverable |
37,005 |
|
|
29,459 |
|
Deferred
acquisition costs, net |
56,136 |
|
|
62,350 |
|
Unearned
premiums ceded |
28,735 |
|
|
25,120 |
|
Notes
receivable, net |
28,612 |
|
|
28,497 |
|
Other
assets |
4,327 |
|
|
3,230 |
|
Total assets |
$ |
2,778,768 |
|
|
$ |
3,357,393 |
|
Liabilities and equity |
|
|
|
Liabilities |
|
|
|
Securities
sold, not yet purchased, at fair value |
$ |
681,278 |
|
|
$ |
912,797 |
|
Financial
contracts payable, at fair value |
18,746 |
|
|
22,222 |
|
Due to
prime brokers and other financial institutions |
520,172 |
|
|
672,700 |
|
Loss and
loss adjustment expense reserves |
474,338 |
|
|
464,380 |
|
Unearned
premium reserves |
244,807 |
|
|
255,818 |
|
Reinsurance
balances payable |
147,096 |
|
|
144,058 |
|
Funds
withheld |
16,946 |
|
|
23,579 |
|
Other
liabilities |
7,284 |
|
|
10,413 |
|
Total liabilities |
2,110,667 |
|
|
2,505,967 |
|
Redeemable
non-controlling interest in related party joint venture |
6,436 |
|
|
7,169 |
|
Equity |
|
|
|
Preferred
share capital (par value $0.10; authorized, 50,000,000; none
issued) |
— |
|
|
— |
|
Ordinary
share capital (Class A: par value $0.10; authorized, 100,000,000;
issued and outstanding, 31,160,544 (2017: 31,104,830): Class B: par
value $0.10; authorized, 25,000,000; issued and outstanding,
6,254,715 (2017: 6,254,715)) |
3,742 |
|
|
3,736 |
|
Additional
paid-in capital |
503,331 |
|
|
503,316 |
|
Retained
earnings |
143,873 |
|
|
324,272 |
|
Shareholders’ equity attributable to
shareholders |
650,946 |
|
|
831,324 |
|
Non-controlling interest in related party joint venture |
10,719 |
|
|
12,933 |
|
Total equity |
661,665 |
|
|
844,257 |
|
Total liabilities, redeemable non-controlling interest and
equity |
$ |
2,778,768 |
|
|
$ |
3,357,393 |
|
|
|
|
|
|
|
|
|
GREENLIGHT CAPITAL RE,
LTD.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED)
For the three and six months ended June
30, 2018 and 2017(expressed in thousands of U.S.
dollars, except per share and share amounts)
|
Three months ended June
30 |
|
Six months ended June
30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
Gross
premiums written |
$ |
142,109 |
|
|
$ |
174,889 |
|
|
$ |
317,234 |
|
|
$ |
372,103 |
|
Gross
premiums ceded |
(27,237 |
) |
|
(2,523 |
) |
|
(57,080 |
) |
|
(5,949 |
) |
Net
premiums written |
114,872 |
|
|
172,366 |
|
|
260,154 |
|
|
366,154 |
|
Change in
net unearned premium reserves |
13,944 |
|
|
(12,042 |
) |
|
14,506 |
|
|
(53,928 |
) |
Net
premiums earned |
128,816 |
|
|
160,324 |
|
|
274,660 |
|
|
312,226 |
|
Net
investment income (loss) [net of related party expenses of $4,131,
$3,148, $8,585 and $8,644] |
(40,656 |
) |
|
(39,149 |
) |
|
(185,872 |
) |
|
(27,531 |
) |
Other
income (expense), net |
(76 |
) |
|
303 |
|
|
(563 |
) |
|
296 |
|
Total
revenues |
88,084 |
|
|
121,478 |
|
|
88,225 |
|
|
284,991 |
|
Expenses |
|
|
|
|
|
|
|
Loss and
loss adjustment expenses incurred, net |
84,815 |
|
|
106,016 |
|
|
180,639 |
|
|
210,828 |
|
Acquisition
costs, net |
34,623 |
|
|
45,429 |
|
|
78,832 |
|
|
88,640 |
|
General and
administrative expenses |
6,958 |
|
|
6,347 |
|
|
12,914 |
|
|
13,090 |
|
Total
expenses |
126,396 |
|
|
157,792 |
|
|
272,385 |
|
|
312,558 |
|
Income
(loss) before income tax |
(38,312 |
) |
|
(36,314 |
) |
|
(184,160 |
) |
|
(27,567 |
) |
Income tax
benefit |
323 |
|
|
295 |
|
|
1,093 |
|
|
174 |
|
Net income
(loss) including non-controlling interest |
(37,989 |
) |
|
(36,019 |
) |
|
(183,067 |
) |
|
(27,393 |
) |
Loss
(income) attributable to non-controlling interest in related party
joint venture |
621 |
|
|
550 |
|
|
2,947 |
|
|
298 |
|
Net
income (loss) |
$ |
(37,368 |
) |
|
$ |
(35,469 |
) |
|
$ |
(180,120 |
) |
|
$ |
(27,095 |
) |
Earnings (loss) per share |
|
|
|
|
|
|
|
Basic |
$ |
(1.01 |
) |
|
$ |
(0.96 |
) |
|
$ |
(4.87 |
) |
|
$ |
(0.73 |
) |
Diluted |
$ |
(1.01 |
) |
|
$ |
(0.96 |
) |
|
$ |
(4.87 |
) |
|
$ |
(0.73 |
) |
Weighted average number of ordinary shares used in the
determination of earnings and loss per share |
|
|
|
|
|
|
|
Basic |
36,952,472 |
|
|
37,025,703 |
|
|
36,950,828 |
|
|
37,009,539 |
|
Diluted |
36,952,472 |
|
|
37,025,703 |
|
|
36,950,828 |
|
|
37,009,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides the ratios for the six months ended
June 30, 2018 and 2017:
|
Six months ended June
30 |
|
2018 |
|
2017 |
|
Property |
|
Casualty |
|
Other |
|
Total |
|
Property |
|
Casualty |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
ratio |
41.6 |
% |
|
76.3 |
% |
|
53.7 |
% |
|
65.8 |
% |
|
61.2 |
% |
|
70.2 |
% |
|
63.8 |
% |
|
67.5 |
% |
Acquisition
cost ratio |
23.3 |
% |
|
24.5 |
% |
|
44.6 |
% |
|
28.7 |
% |
|
30.7 |
% |
|
26.3 |
% |
|
35.1 |
% |
|
28.4 |
% |
Composite
ratio |
64.9 |
% |
|
100.8 |
% |
|
98.3 |
% |
|
94.5 |
% |
|
91.9 |
% |
|
96.5 |
% |
|
98.9 |
% |
|
95.9 |
% |
Underwriting expense ratio |
|
|
|
|
|
|
2.8 |
% |
|
|
|
|
|
|
|
2.6 |
% |
Combined
ratio |
|
|
|
|
|
|
97.3 |
% |
|
|
|
|
|
|
|
98.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greenlight Capital Re (NASDAQ:GLRE)
Historical Stock Chart
From Apr 2024 to May 2024
Greenlight Capital Re (NASDAQ:GLRE)
Historical Stock Chart
From May 2023 to May 2024