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2020-08-10

Enstar Group Limited Reports Second Quarter Results

  • Net Earnings of $798.6 million  and $281.7 million for the Three and Six Months Ended June 30, 2020, primarily driven by strong investments performance 
  • Non-GAAP Operating Income of $567.6 million and $229.8 million for the Three and Six Months Ended June 30, 2020
  • Increase in fully diluted book value per share of 23.3% and 7.6% for the Three and Six Months Ended June 30, 2020 (non-annualized)

HAMILTON, Bermuda, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Enstar Group Limited (Nasdaq: ESGR) filed its quarterly report on Form 10-Q with the SEC earlier today, reporting its earnings and financial position for the three and six months ended June 30, 2020.

Enstar reported consolidated net earnings of $798.6 million (or $36.65 per fully diluted ordinary share) and  $281.7 million (or $12.93 per fully diluted ordinary share) for the three and six months ended June 30, 2020, respectively, compared to consolidated net earnings of $231.8 million (or $10.70 per fully diluted ordinary share) and $590.6 million (or $27.26 per fully diluted ordinary share) for the three and six months ended June 30, 2019, respectively.

The key drivers of net earnings were:

  • Net realized and unrealized gains of $967.6 million for the three months ended June 30, 2020, including $550.2 million relating to other investments and equities and $417.4 million relating to fixed income securities;
  • Net realized and unrealized gains of $338.5 million for the six months ended June 30, 2020, including $198.7 million relating to other investments and equities and $139.8 million relating to fixed income securities;

Non-GAAP operating income1 was $567.6 million (or $26.05 per fully diluted ordinary share1)  and  $229.8 million (or $10.55 per fully diluted ordinary share) for the three and six months ended June 30, 2020, respectively, compared to non-GAAP operating income of $109.7 million (or $5.06 per fully diluted ordinary share) and $308.4 million (or $14.24 per fully diluted ordinary share) for the three and six months ended June 30, 2019, respectively.

1 Non-GAAP operating income (loss) and non-GAAP operating income (loss) per fully diluted ordinary share are non-GAAP financial measures as defined in SEC Regulation G. The reconciliations of these non-GAAP measures to the most comparable GAAP financial measures (net earnings (loss) attributable to Enstar ordinary shareholders and diluted net earnings (loss) per ordinary share, respectively) are provided below, along with a discussion of the rationale for the presentation of these items.

Enstar's ordinary shareholders' equity at June 30, 2020 amounted to $4,676.9 million (or $213.06 per fully diluted ordinary share), compared to $4,332.2 million (or $197.93 per fully diluted ordinary share) at December 31, 2019. The Form 10-Q, which is available on Enstar's website, www.enstargroup.com, contains a more detailed description of Enstar's business and financial results.

About Enstar

Enstar is a multi-faceted insurance group, with approximately $21.3 billion in assets, that offers innovative capital release solutions and specialty underwriting capabilities through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Enstar is a market leader in completing legacy acquisitions, having acquired over 100 companies and portfolios since its formation in 2001. Enstar’s active underwriting businesses include the StarStone group of companies, an A- rated global specialty insurance group with multiple global underwriting platforms, and the Atrium group of companies, which manage and underwrite specialist insurance and reinsurance business for Lloyd’s Syndicate 609. For further information about Enstar, see www.enstargroup.com.

Non-GAAP Financial Measures

In addition to presenting net earnings (loss) attributable to Enstar ordinary shareholders and diluted earnings (loss) per ordinary share determined in accordance with U.S. GAAP, we believe that presenting non-GAAP operating income (loss) attributable to Enstar ordinary shareholders and diluted non-GAAP operating income (loss) per ordinary share, non-GAAP financial measures as defined in SEC Regulation G, provides investors with valuable measures of our performance.

Non-GAAP operating income (loss) excludes: (i) net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed included in net earnings (loss), (ii) change in fair value of insurance contracts for which we have elected the fair value option, (iii) gain (loss) on sale of subsidiaries, if any, (vi) net earnings (loss) from discontinued operations, if any, (v) tax effect of these adjustments where applicable, and (vi) attribution of share of adjustments to noncontrolling interest where applicable. We eliminate the impact of net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed and change in fair value of insurance contracts for which we have elected the fair value option because these items are subject to significant fluctuations in fair value from period to period, driven primarily by market conditions and general economic conditions, and therefore their impact on our earnings is not reflective of the performance of our core operations. When applicable, we eliminate the impact of gain (loss) on sale of subsidiaries and net earnings (loss) from discontinued operations because these are not reflective of the performance of our core operations.

We believe these non-GAAP measures enable readers of our consolidated financial statements to analyze our results in a way that is more aligned with the manner in which our management measures our underlying performance. We believe that presenting these non-GAAP financial measures, which may be defined and calculated differently by other companies, improves the understanding of our consolidated results of operations. These measures should not be viewed as substitutes for those calculated in accordance with U.S. GAAP.

Reconciliation of Non-GAAP Financial Measures

Non-GAAP operating income attributable to Enstar ordinary shareholders is calculated by the addition or subtraction of certain items from within our consolidated statements of earnings to or from net earnings attributable to Enstar ordinary shareholders, the most directly comparable GAAP financial measure, as illustrated in the table below:

 Three Months Ended Six Months Ended
 June 30, June 30,
 2020 2019 2020 2019
 (expressed in thousands of U.S. dollars, except share and per share data)
Net earnings attributable to Enstar ordinary shareholders$798,553  $231,842  $281,732  $590,593 
Adjustments:       
Net realized and unrealized (gains) on fixed maturity investments and funds held - directly managed (1)(417,364) (185,819

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