Attached files
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| 8-K - FORM 8-K Q2 2011 EARNINGS RELEASE - GREENLIGHT CAPITAL RE, LTD. | form8kearningsrelease.htm |
GREENLIGHT RE ANNOUNCES
SECOND QUARTER 2011 FINANCIAL RESULTS
GRAND CAYMAN, Cayman Islands (August 9, 2011) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the second quarter of 2011. Greenlight Re reported a net loss of $16.0 million for the second quarter of 2011 compared to a net profit of $17.7 million for the same period in 2010. The net loss per share was $0.44 for the second quarter of 2011, compared to a net income per share of $0.47 on a fully diluted basis for the same period in 2010.
Fully diluted adjusted book value per share was $19.82 as of June 30, 2011, a 3.9% increase from $19.07 per share as of June 30, 2010.
For the six months ended June 30, 2011, Greenlight Re reported a net loss of $59.0 million compared to net income of $5.3 million for the same period in 2010. The net loss per share was $1.63 for the six months ended June 30, 2011, compared to net income per share of $0.14 on a fully diluted basis for the same period in 2010.
“We achieved a modest underwriting profit for the second quarter of 2011 while maintaining our discipline in underwriting,” said David Einhorn, Chairman of the Board of Directors of Greenlight Re. “Our investment portfolio generated a small loss during the quarter in a challenging investment environment.”
Financial and operating highlights for Greenlight Re for the second quarter ended June 30, 2011 include:
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●
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Gross written premiums in the second quarter of 2011 were $113.3 million compared to $89.0 million in the second quarter of 2010, while net earned premiums were $107.2 million, an increase from $49.4 million reported in the second quarter of last year.
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●
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The combined ratio for the six months ended June 30, 2011 was 102.1% compared to 99.6% for the six months ended June 30, 2010.
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●
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A net investment loss of $19.5 million was reported for the second quarter of 2011, representing a loss of 1.9% to our investment portfolio. This compares to investment income of $22.6 million in the second quarter of 2010, when we reported a 2.6% gain on our investment portfolio. For the first six months of 2011, the net investment loss was $55.6 million compared to net investment income of $5.8 million during the comparable period in 2010.
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“We continue to grow our frequency focused underwriting portfolio and are pleased with the deep relationships we have developed with our clients,” said Len Goldberg, Chief Executive Officer of Greenlight Re. “We have yet to see signs of a hardening reinsurance market and we remain cautious as we pursue and evaluate opportunities.”
Conference Call Details
Greenlight Re will hold a live conference call to discuss its financial results for the second quarter of 2011 on Wednesday, August 10, 2011 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Second Quarter 2011 Earnings Call.
To participate, please dial in to the conference call at:
U.S. toll free 1-877-317-6789
International 1-412-317-6789
The conference call can also be accessed via webcast at:
https://services.choruscall.com/links/glre110810.html
A telephone replay of the call will be available from 11:00 a.m. Eastern time on August 10, 2011 until 9:00 a.m. Eastern time on August 25, 2011. 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 10002298. An audio file of the call will also be available on the Company’s website, www.greenlightre.ky.
###
Regulation G
Fully diluted adjusted book value per share is 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 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. 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 reinsurance industry.
Forward-Looking Statements
This 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.
Greenlight Re (www.greenlightre.ky) is an AM Best "A-" (Excellent) rated specialist property and casualty reinsurance company based in the Cayman Islands. The Company provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces. Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited. With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re's assets are managed according to a value-oriented equity-focused strategy that complements the Company's business goal of long-term growth in book value per share.
Contact:
Alex Stanton
Stanton Public Relations & Marketing
(212) 780-0701
astanton@stantonprm.com
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2011 and December 31, 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
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June 30, 2011
(unaudited)
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December 31, 2010
(audited)
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|||||||
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Assets
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||||||||
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Investments
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||||||||
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Debt instruments, trading, at fair value
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$
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3,364
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$
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15,610
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||||
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Equity securities, trading, at fair value
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831,175
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839,921
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||||||
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Other investments, at fair value
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204,354
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196,490
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||||||
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Total investments
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1,038,893
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1,052,021
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||||||
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Cash and cash equivalents
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9,611
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45,540
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||||||
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Restricted cash and cash equivalents
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956,663
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977,293
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||||||
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Financial contracts receivable, at fair value
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23,810
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28,701
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||||||
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Reinsurance balances receivable
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118,429
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109,567
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||||||
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Loss and loss adjustment expenses recoverable
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15,236
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11,976
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||||||
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Deferred acquisition costs, net
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80,625
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87,389
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||||||
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Unearned premiums ceded
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18,159
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7,424
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||||||
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Notes receivable
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17,955
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14,205
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||||||
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Other assets
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5,364
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3,886
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||||||
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Total assets
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$
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2,284,745
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$
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2,338,002
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Liabilities and shareholders’ equity
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||||||||
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Liabilities
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||||||||
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Securities sold, not yet purchased, at fair value
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$
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680,863
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$
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726,737
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Financial contracts payable, at fair value
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12,896
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22,746
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||||||
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Due to prime brokers
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309,492
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273,071
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Loss and loss adjustment expense reserves
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218,618
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186,467
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Unearned premium reserves
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226,915
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234,983
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||||||
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Reinsurance balances payable
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28,152
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20,164
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Funds withheld
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27,251
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22,887
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Other liabilities
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10,373
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11,786
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Total liabilities
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1,514,560
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1,498,841
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Shareholders’ equity
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||||||||
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Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)
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—
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—
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||||||
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Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,320,867 (2010: 30,200,835): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2010: 6,254,949))
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3,658
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3,646
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Additional paid-in capital
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487,567
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485,555
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Non-controlling interest in joint venture
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33,709
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45,758
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Retained earnings
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245,251
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304,202
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Total shareholders’ equity
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770,185
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839,161
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||||||
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Total liabilities and shareholders’ equity
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$
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2,284,745
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$
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2,338,002
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||||
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three and six months ended June 30, 2011 and 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
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Three months ended June 30,
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Six months ended June 30,
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2011
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2010
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2011
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2010
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Revenues
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Gross premiums written
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$
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113,266
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$
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88,956
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$
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214,005
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$
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155,843
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Gross premiums ceded
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(17,183
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)
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(4,011
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)
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(20,659
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)
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(4,589
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)
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Net premiums written
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96,083
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84,945
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193,346
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151,254
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|||||||||
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Change in net unearned premium reserves
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11,068
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(35,544
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)
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18,962
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(46,537
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)
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Net premiums earned
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107,151
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49,401
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212,308
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104,717
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Net investment income (loss)
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(19,469
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)
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22,632
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(55,645
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)
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5,801
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|||||||
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Other income (expense), net
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(86
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)
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(374
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)
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(347
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)
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(528)
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Total revenues
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87,596
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71,659
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156,316
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109,990
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Expenses
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|||||||||||||
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Loss and loss adjustment expenses incurred, net
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56,870
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35,544
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122,595
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64,679
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|||||||||
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Acquisition costs, net
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42,824
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14,465
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84,945
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31,376
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|||||||||
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General and administrative expenses
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4,336
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3,094
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9,335
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8,241
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|||||||||
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Total expenses
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104,030
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53,103
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216,875
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104,296
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|||||||||
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Net income (loss) before non-controlling interest and income tax expense
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(16,434
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)
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18,556
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(60,559
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)
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5,694
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|||||||
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Non-controlling interest in (income) loss of joint venture
|
513
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(854
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)
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1,649
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(375)
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||||||||
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Net income (loss) before income tax expense
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(15,921
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)
|
17,702
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(58,910
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)
|
5,319
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|||||||
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Income tax benefit (expense)
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(40
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)
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(50
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)
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(41
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)
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(58
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)
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Net income (loss)
|
$
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(15,961
|
)
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$
|
17,652
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$
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(58,951
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)
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$
|
5,261
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|||
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Earnings (loss) per share
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|||||||||||||
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Basic
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$
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(0.44
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)
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$
|
0.48
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$
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(1.63
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)
|
$
|
0.14
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|||
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Diluted
|
$
|
(0.44
|
)
|
$
|
0.47
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$
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(1.63
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)
|
$
|
0.14
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|||
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Weighted average number of ordinary shares used in the determination of earnings (loss) per share
|
|||||||||||||
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Basic
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36,153,743
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36,436,903
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36,153,743
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36,386,697
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|||||||||
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Diluted
|
36,153,743
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37,218,783
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36,153,743
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37,155,475
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The following table provides the ratios for the six months ended June 30, 2011 and 2010:
|
Six months ended
June 30, 2011
|
Six months ended
June 30, 2010
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Frequency
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Severity
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Total
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Frequency
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Severity
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Total
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|||||||||||||||||||
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Loss ratio
|
57.7
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%
|
58.6
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%
|
57.7
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%
|
69.0
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%
|
22.1
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%
|
61.7
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%
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||||||||||||
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Acquisition cost ratio
|
41.0
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%
|
18.8
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%
|
40.0
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%
|
33.4
|
%
|
11.2
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%
|
30.0
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%
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||||||||||||
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Composite ratio
|
98.7
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%
|
77.4
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%
|
97.7
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%
|
102.4
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%
|
33.3
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%
|
91.7
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%
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||||||||||||
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Internal expense ratio
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4.4
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%
|
7.9
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%
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||||||||||||||||||||
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Combined ratio
|
102.1
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%
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99.6
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%
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