Middlesea Insurance registers €8.86m pre-tax profit after 2009’s €62m loss

Middlesea Insurance plc has registered a satisfactory profit before tax of €8.86million in 2010 when compared to the comparative loss of  €62.88million registered in FY 2009. The Middlesea Group reported a profit before tax of €6.44million in comparison to the loss of €54.4million on the consolidated accounts for 2009.

“2010 was an eventful and challenging year,” chairman Joseph F.X. Zahra at Middlesea Insurance plc. “It marked a stabilisation year which was crucial in taking the company forward.”

Zahra said that focus was re-set on local operations, in order to consolidate and improve upon Middlesea’s leadership position in the Maltese market. The main operating companies of the Group were realigned as stand-alone, autonomous companies, each focussing on core domestic operations.

Whilst registering an increase in premiums of 4.9% and recording satisfactory profits, Middlesea Insurance plcalso strengthened its balance sheet and improved its regulatory solvency position with Shareholders’ Equity amounting to €54.9millionas at 31 December 2010 on a consolidated basis.

At the same time MSV Life plc, a jointly controlled company with Bank of Valletta plc, registered a record year of turnover, with total premiums for the year increasing by 18.3% to €147.49million  and total comprehensive income of €9.65million.

MSV Life which is by far the leading life insurer in Malta, further consolidated its position increasing its total assets to €1.1billion, and currently boasts Shareholders’ Equity of €108.89million and a base of more than 83,500 customers.

Progress Assicurazioni SpA, the subsidiary company of Middlesea Insurance plc is in liquidation and in February 2011 an application was made by the Liquidator to the Italian Courts in Palermo, requesting that the bankruptcy of the company be ascertained and declared as such by the court. This is a normal procedure for Liquidators to obtain a Court Ruling in order to enable them to move forward with the liquidation process.

“Notwithstadning the satisfactory profits registered during the year, the Board of Directors cannot and is not recommending the payment of a dividend, due to accumulated losses on the Profit & Loss a/c arising from the adverseresults registered by Progress Assicurazioni SpA over the last 2 financial years - with such a position on the Profit & Loss a/c the provisions of the Companies Act prohibit the ability of the company to declare a dividend,” Zahra said.

In order to restore the company’s potentialto declare prudent dividends, during the upcoming Annual General Meeting of the 3rd of May 2011, the Board of Directors will be recommending a solution that is contemplated directly by the Companies Act,involving the offsetting of accumulated losses against the issued share capital and share premium account of the company.  This will have no impact on the Shareholders’ Funds and the Net Asset Value of the company.