Echelon Financial Holdings Inc. Reports Second Quarter 2019 Results

TORONTO, Aug. 6, 2019 /CNW/ - Echelon Financial Holdings Inc. ("EFH" or "the Company") (TSX: EFH), which operates in the property and casualty insurance industry in Canada, today reported a net income of $55.6 million or $4.55 per diluted share, for the three months ended June 30, 2019. These results included net income on discontinued operations of $55.4 million or $4.54 per diluted share. Net Income on continued operations was $0.2 million or $0.01 per diluted share for the three months ended June 30, 2019.

Second Quarter 2019 Highlights

• The sale of Echelon Insurance and the unregulated warranty business of Echelon Financial Holdings Inc. was completed on May 31, 2019. The gain on sale, net of expenses and taxes, was $56.2 million. The operations of discontinued businesses to the closing of May 31, 2019 lost $0.8 million in the second quarter. Net income on Discontinued Operations in this quarter were $55.4 million.
• Net Income of $4.55 per diluted share compared to an income of $0.33 per diluted share in the second quarter of 2018. Net Income on continued operations of $0.01 per share compared to a loss of $0.02 per share in the second quarter of 2018.
• Direct written premiums increased by $0.5 million over the same period in 2018 to $11.0 million as the Company is cautious in writing business while it is awaiting implementation of rate increases.
• Closing book value per share of $7.48 has decreased despite Net Income per share of $4.55 for the quarter because the Company paid a dividend of $8.80 per share in this quarter.
  

Financial Summary

		3 months ended June 30		6 months ended June 30
($ THOUSANDS except per share amounts)		2019	2018	2019	2018
Direct written and assumed premiums		10,972	10,425	17,929	17,184
Net earned premiums		7,921	7,497	15,462	14,668
Net claims incurred		4,853	4,933	9,405	10,698
Net acquisition costs		1,701	1,896	3,364	3,740
Operating expenses		1,239	1,214	2,162	2,187
Corporate expense		201	440	703	955
Underwriting income (loss)		128	(546)	531	(1,957)
Investment income		430	377	985	802
Impact of change in discount rate on claims		(138)	56	(308)	149
Net income before interest and income taxes		219	(553)	505	(1,961)
Income tax expense		22	(294)	105	(605)
Net income on continued operations		197	(259)	400	(1,356)
Net income on discontinued operations		55,405	4,223	46,220	10.987
Net Income		55,602	3,964	46,620	9,631
Net income attributed to:
Shareholders of the Company – continued operations		138	(203)	220	(1,116)
Shareholders of the Company – discontinued operations		55,405	4,223	46,220	10,987
Non-controlling interest – continued operations		59	(56)	180	(240)
Earnings per share
Continued operations
Basic		$0.01	$(0.02)	$0.02	$(0.09)
Diluted		$0.01	$(0.02)	$0.02	$(0.09)
Discontinued operations
Basic		$4.62	$0.35	$3.86	$0.92
Diluted		$4.54	$0.35	$3.77	$0.90

Full Financial Statements and Management's Discussion and Analysis (MD&A) are available on SEDAR and on the Company's web site at efh.ca.

Non-IFRS Financial Measures

EFH uses International Financial Reporting Standards (IFRS) and certain non-IFRS measures to assess performance. Readers are cautioned that non-IFRS measures do not have a standardized meaning under IFRS and may not be comparable to similar measures used by other companies. EFH analyzes performance based on operating income and underwriting ratios such as combined, expense and loss ratios.

Forward-looking Information

This news release contains forward-looking information based on current expectations. This information includes, but is not limited to, statements about the operations, business, financial condition, priorities, targets, ongoing objectives, strategies, litigation outcomes and outlook of EFH for 2019 and subsequent periods.

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a projection as reflected in the forward-looking information. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific. A variety of material factors, many of which are beyond EFH's control, affect the operations, performance and results of its business and could cause actual results to differ materially from the expectations expressed in any of this forward-looking information.

EFH does not undertake to update any forward-looking information. Additional information about the risks and uncertainties about Echelon's business is provided in its disclosure materials, including its Annual Information Form and Management Discussion & Analysis, filed with the securities regulatory authorities in Canada, available at www.sedar.com.

About Echelon Financial Holdings Inc.

Founded in 1998, Echelon Financial Holdings Inc. operates in the property and casualty insurance industry in Canada, providing personal and commercial lines insurance exclusively through the broker channel. The Company distributes insurance products through The Insurance Company of Prince Edward Island. It trades on the Toronto Stock Exchange under the symbol EFH. For more information, please visit efh.ca

SOURCE Echelon Financial Holdings Inc.

Company contact information: Investor Relations, 905-602-2150, [email protected]

Related Links

http://www.efh.ca/