At year-end 2017, Grupo SURA posted revenues of COP 20.5 billion along with consolidated net income totaling COP 1.45 billion
• The parent of the Sura Business Group obtained a 12% year-on-year growth in consolidated revenues thanks to continuing good levels of performance on the part of its subsidiaries, Suramericana and SURA Asset Management, in spite of the challenges posed in today´s business environment.
• Net income declined by 13%, given exchange differences, non-comparable items and non-recurring expense. Were we to exclude the aforementioned items, net income would have risen by 7.7% year-on-year.
• Net earnings doubled during Q4, 2017 to a total of COP 357,175 million, driven by returns on investments and strict controls over business expense.
On Monday Grupo SURA announced its full year results for 2017, a year characterized by lower economic activity throughout Latin America. Fortunately, this did not halt the Group´s ongoing business growth, thanks to the all-out efforts carried out to further its efficiency and profitability as well as the ongoing consolidation of its insurance, pensions, savings and investment operations, among other financial services.
Consolidated revenues totaled COP 20.5 billion (USD 6,993 million), for a growth of 12% compared to the previous year. This was largely due to a 20.9% increase in total revenues on the part of Suramericana (COP 14.2 billion, USD 4,812 million), while operating income corresponding to SURA Asset Management rose by 12% (COP 2.4 billion, USD 808 million).
On the other hand, Grupo Sura's consolidated expense increased by 14.5% (COP 18.6 billion, USD 6,306 million), with Suramericana incurring in a full year´s integration expenditure with regard to the operations acquired from RSA, as well as amortizations and higher interest expense on the debt taken out to finance the aforementioned acquisition. Nevertheless, both subsidiaries saw an evident improvement with their efficiency indicators with operating expense in the case of SURA Asset Management increasing by a mere 6.5%, which was almost half the increase posted in total revenues, while those of Suramericana rose by 20.4% year on year, which again was lower than the increase in its total revenues.
Consequently, consolidated net income reached COP 1.45 billion (USD 493 million), having declined by 13% compared to the previous year, this mainly due to the exchange rate effect (COP 173,888 million), along with the aforementioned interest expense and other non-recurring items. Were we to exclude the aforementioned adverse effects, Grupo SURA's net income would have risen by 7.7%, given the level of operating performance obtained by both subsidiaries.
"After a decade of international expansion, strengthening our financial position and diversifying our sources of income, 2017 was a year in which we focused on consolidating our inorganic growth, furthering the strategic management of our portfolio for optimal performance and greater profitability, as well as driving the scale of our Business Group throughout Latin America ".
Upon examining the Group´s earnings for Q4, we see consolidated revenues totaling COP 5.3 billion (USD 1,799 million), for an increase of 1.3% compared to the same period the previous year, while consolidated net income came to COP 357,175 million (USD 121 million), showing a remarkable growth of 102.5%, thanks to the three-pronged effect of lower reserves being set up for the insurance business, higher returns obtained on subsidiary investment portfolios as well as a 0.9% decline in total expense.
Subsidiary performance
SURA Asset Management, for its part, posted a 16.9% full-year increase in operating earnings, this measured in local currencies, as well as net earnings amounting to COP 615,229 million (USD 208.5 million), which were similar to those obtained the previous year. It is worthwhile noting that the voluntary savings sector saw increases of 26% in terms of commission and fee income and another 39% with respect to assets under management.
"In addition to securing a dynamic pace of operating performance, a growth in revenues and higher returns on our investments, 2017 was a year in which we made significant progress in honing our business model, promoting our Savings and Investment Unit as well as creating our new Asset Management Unit, all of which has helped us become an attractive and robust regional platform for large-scale investors", stated Ignacio Calle, Chief Executive Officer of SURA Asset Management
On the other hand, Suramericana, the Group´s insurance and risk and trend management subsidiary, produced a net income of COP 506,586 million (USD 172 million) at year-end 2017 for a year-on-year growth of 26.1%.
Similarly, written premiums came to COP 12.02 billion (USD 4.073 million), for a growth of 23%, with consolidated reserves reaching COP 15.26 billion (USD 5,115 million).
"Our main challenges in 2017 were to consolidate our regional operations and reinforce our offering of solutions aimed at leveraging experiences with different stakeholder groups. Our success in dealing with these challenges can be plainly seen with the results that Suramericana and each of its subsidiaries are reporting today, which have gone beyond the initially budgeted figures in terms of written premiums and net income", stated Gonzalo Perez, Suramericana´s Chief Executive Officer.
All in all, Grupo SURA posted assets totaling COP 69.4 billion (USD 23,249 million) at the end of 2017, which was 2.8% higher than those obtained a year ago; whereas liabilities rose by 2.4% to COP 43.1 billion (USD 14,460 million); and shareholders´ equity reached COP 23.8 billion (USD 7,986 million) for a year-on-year growth of 5.2%.
Finally, at the upcoming Annual Shareholders' Meeting, to be held on March 23 at the Plaza Mayor (Medellín), a proposal shall be submitted for the distribution of profits corresponding to 2018 this consisting of an annual dividend payment of COP 518 per share, this being 6.15% higher than for 2017, for a total of COP 301,464 million to be distributed amongst the shareholders.
About Grupo SURA
Grupo de Inversiones Suramericana, the parent company of the Sura Business Group is a Latin American company listed on the Colombian Stock Exchange and registered with the ADR- Level 1 program in the United States. We are also the only company from the Latin American Diversified Financial Service Sector to be admitted to the Dow Jones Sustainability World Index, which lists companies who have become global benchmarks thanks to the best practices they have adopted from the economic, environmental and social standpoints. GRUPO SURA has two fields of investment: its core strategic interests in the financial service, insurance, pension, savings and investment sectors, and its industrial interests in the processed food, cement, energy and infrastructure sectors.