Maiden Beats on Q4 Earnings, Misses Revs
Maiden Holdings, Ltd. (MHLD) reported record fourth-quarter 2013 operating net earnings of 30 cents a share, beating the Zacks Consensus Estimate of 28 cents by 7.1%. The number also surged over the prior-year quarter net operating loss of 14 cents per share. With this result, Maiden Holdings successfully posted positive earnings surprises in the last four straight quarters.
The bottom-line improvement was attributable to sturdy organic growth coupled with declining expenses during the quarter.
Including net realized losses on investment, foreign exchange and other gains, amortization of intangible assets and non-cash deferred tax expense, net income for Maiden Holdings came in at 27 cents a share rebounding from a net loss of 14 cents per share reported in the year-ago quarter.
Operational Update
Total revenue during the fourth quarter increased 2.9% year over year to $519.3 million Driven by higher premiums and increased investment income shored up the revenues. Revenues lagged the Zacks Consensus Estimate of $550 million by 5.6%.
Net premiums written during the quarter inched up 0.7% to $445.9 million mainly led by growth in the Diversified Reinsurance segment and AmTrust Quota Share Reinsurance segment. Growth in the AmTrust Quota Share Reinsurance segment was driven by new business growth and continued increase in rate across some lines of business like worker’s compensation.
Net investment income of Maiden Holdings in the fourth quarter of 2013 was $25.4 million, up 20.2% year over year.
Total expense during the quarter declined 3.9% year over year to $480.7 million reflecting lower net loss and loss adjustment expenses.
Combined ratio of Maiden Holdings improved 640 basis points year over year to 97.3% owing to absence of any adverse impact from catastrophe losses during the quarter.
Full-Year 2013 Highlights
Maiden reported net operating earnings of $1.18 per share, escalating 78.8% year over year and also surpassing the Zacks Consensus Estimate of $1.15 per share by 2.6%. The top-line surge came on the back of continued focus in underwriting discipline and top-line growth.
Full-year revenues totaled $2.11 billion, up 11.1% from the 2012 number. Higher net earned premiums and net investment income drove the top-line improvement.
Dividend Update
During the fourth quarter, the board of directors at Maiden Holdings increased its quarterly dividend by 22% to 11 cents a share.
Financial Update
As of 2013 end, Maiden Holdings had cash and cash equivalents of $139.8 million compared with $131.3 million as of Sep 30, 2013.
As of Dec 31, 2013, Maiden Holdings had assets worth $4.71 billion, up from $4.45 billion as of third-quarter end.
Shareholders’ equity as of 2013-end was $1.12 billion compared with $973.9 million as of Sep 30, 2013. Return on equity (:ROE) for 2013 stood at 11.3%, compared to (4.6)% reported at the end of 2012. Book value at 2013-end was $11.12 per share against $12.10 as of Mar 31, 2013.
Zacks Rank
Maiden Holdings presently carries a Zacks Rank #3 (Hold). Among other property and casualty insurers, White Mountains Insurance Group, Ltd. (WTM), Greenlight Capital Re, Ltd. (GLRE), and Navigators Group Inc. (NAVG) with a Zacks Rank #1 (Strong Buy) are worth considering.
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