LOJ president and CEO Richard Byles led the company to $3.4 billion of profit at the company's financial year end December 31, 2007. - File

Life of Jamaica (LOJ), the financial services conglomerate, says it will pay out approximately $900 million in interim dividend against 2008 projected profit, even ahead of finalising the results for its first quarter that ends on March 31.

LOJ announced its plan in a posting with the Jamaica Stock Exchange on Wednesday, saying that shareholders on record at March 18, will get a payment of 24 cents per stock.

The largesse to shareholders follows a $1.12 billion dividend payout by LOJ, Jamaica's largest insurance company, in 2007, against profits made in that year of $3.4 billion.

At the end of December LOJ had just under 3.75 billion issued shares.

The current payment will be made March 18 to stockholders on record as at March 14.

Yesterday, the group's financial controller, Ivan Carter confirmed that this payment would be an initial amount and would likely best the ratio of payments made last year.

"For all practical purposes, it (the payment) is against 2008 profits," Carter told the Financial Gleaner.

"During 2007 we paid out about 40 per cent of profit and that was consistent with our dividend policy."

He, however, confirmed that the payment this year would be "beyond the 40 per cent" - but how much so he would not say. He also declined to reveal the group's profit projection for the year.

"I would not be able to tell that," Carter said. "That would be going into sensitive management information."

Last year LOJ, whose business includes insurance, banking and real estate, reported net profit of $3.42 billion on total revenue of $16.96 billion. But after allocation of $464.3 million to minority interest, approximately $2.956 billion was attributable to stockholders. Net profit was up 15 per cent, representing a return of 79 cents per stock, up 14.5 per cent on the 69 cents of 2006.

30 cents a share

The group paid 30 cents a share, or $1.124 billion in dividend, against the 2006 payout of 27 cents a share.

Shareholders took home a $1-billion share of the $3 billion made by the company in 2006. The bulk of the profit will go to the Barbados-based Sagicor Financial Corporation, which owns approximately 60 per cent of LOJ, and First Jamaica Investment Ltd, which controls 24.5 per cent.

First Jamaica Investment is a subsidiary of the Maurice Facey-controlled Pan Jamaica Investment Trust.

Richard Byles, LOJ's CEO, is travelling abroad and was unavailable for comment, but he, chairman Dodridge Miller and the rest of the board were apparently confident of making an early dividend call after the group's strong growth in most business segments last year and its relative success in controlling costs.

For instance, the company's individual life division saw a 17 per cent increase in actual earned premium, to just over $5 billion, while premium from its employee benefits business grew 10 per cent to $6.46 billion.

Net investment income was up 15 per cent to $4.13 billion.

On the banking side, through its majority stake in Pan Caribbean Financial Services, revenue grew 13 per cent to $2.56 billion.

Two per cent higher

At the same time, the $5.46 billion LOJ paid or accrued to policyholders was only two per cent higher than 2006.

Surrenders and withdrawals from individual life policies, at a cost of $586.7 million was, similarly, two per cent higher than the year before.

Even with a sharp upward tick in Jamaica's inflation last year that negatively impacted some segments of the business, health claims at approximately $3.1 billion, represented an increase of only 10 per cent.

Significantly, too, LOJ reported that it was able to keep the growth in is administrative and depreciation expenses to nine per cent, at $3.828 billion.

Critically, it was able to lower the ratio of its administration and depreciation expenses to revenue from 24 per cent to 23 per cent.

"2007 was a successful year for LOJ and its subsidiaries," said Byles and Miller in their statement accompanying the year's accounts.

business@gleanerjm.com