Company Announcement 21 July 2016

Company Announcement 24 July 2016

MMS/CF/MSE00916

21 July 2016

Company Announcement pursuant to the Listing Rules of the Malta Financial Services Authority

The following is a Company Announcement issued by Mapfre Middlesea p.l.c., pursuant to the Listing Rules of the Malta Financial Services Authority.

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The Board of Directors of Mapfre Middlesea p.l.c., have today the 21 July 2016, considered and approved the unaudited financial statements of the Group for the financial half year ended 30 June 2016. A preliminary statement of interim results is being attached herewith in terms of the Listing Rules. The Interim Financial Statements are available for viewing on the Company’s website at www.middlesea.com.

In line with Company policy, the Board of Directors does not propose the payment of an interim dividend.

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By Order of the Board

Carlo Farrugia

Company Secretary

Review of Group Operations
Half Yearly Financial Statements – 30 June 2016

Commentary
The Directors present the unaudited consolidated interim results of Mapfre Middlesea p.l.c..
The consolidated Mapfre Middlesea Group result for the first six months of 2016 amounted to a profit before tax of €5.67 million, compared to €15.18 million registered during the comparative period last year. The profit after tax allocated to shareholders amounted to €2.17 million as compared to €5.27 million in 2015. The June 2015 result was an exceptional one particularly for MSV Life p.l.c. (“MSV”) both due to a one-off reinsurance cost adjustment and returns on financial investments that peaked in the first six months of 2015.
The growth in general business acquired by Mapfre Middlesea p.l.c. (“Company”) during the last twelve months and the growth in operations to support it, increased the cost base of the Company significantly. With such portfolios still being fully assimilated, and with pricing still being adjusted, the resulting technical result performed below the comparative period of 2015. The recent poor performance in both local and foreign financial markets lead to negative fair value movements further compounded the subdued technical results.
The results of MSV reflect the introduction of an annual management charge on assets under management introduced at the beginning of the year which provides stability to the results shielding them from the impact of fluctuations in the financial markets.
Group’s gross premiums written have increased by 44.90% during the first six months of 2016. The growth in General Business turnover of 47.42% was derived from the portfolio transfer concluded in 2015 and new intermediaries but also through strong organic growth. Life premiums written saw a growth of 44.40%. This reflects the competitiveness of such products as compared to other available financial instruments in the market with a high percentage of maturities being reinvested with MSV.
The Group continues to enjoy a healthy Solvency position as a result of the attained positive results.

Financial highlights for the half year

• General Business Gross Premium written increased by 47.42% from €20.86 million in 2015 to €30.75 million as at the 30 June 2016.
• Long term Gross Premium Written by the Group increased by 44.40% to €151.91 million compared to €105.20 million in the comparative period in 2015.
• Return from Investments allocated to the non-technical account for the six months to 30 June 2016 amounted to a gain of €0.50 million compared to €1.04 million in 2015.
• The Group registered a Profit after taxation for the 6 months ended 30 June 2016 of €4.02 million, of which €2.17 million attributable to shareholders, compared with a profit after taxation of €9.77 million for the same period last year of which €5.27 million attributable to shareholders.
• Gross Technical Provisions at 30 June 2016 increased by 4.49% to €1.69 billion over the 31 December 2015 reserves of €1.62 billion. Net of reinsurers’ share, technical provisions stand at €1.68 billion, an increase of 4.46% over the 31 December 2015 provisions of €1.61 billion.
• Total assets increased by 4.28% and totaled €1.90 billion as at 30 June 2016, as compared to the total assets of €1.82 billion at 31 December 2015.
• Total Equity of the Group attributable to shareholders amounted to €82.37 million as at 30 June 2016, up from €82.30 million at 31 December 2015 with a net asset value per share of €0.90.
• Both insurance companies in the Group are compliant with the regulatory solvency requirements under Solvency II regime.

Outlook
The Group will continue to take the necessary actions aimed at improve its technical results during the second half of the year. Through the execution of strategic initiatives the Company aims at delivering improved results to its shareholders whilst continuing to offer its clients the best value in all lines of business and adhering to its mission of being the most trusted insurer.
In line with Company policy, the Board of Directors do not propose to pay an interim dividend for the half year ended 30 June 2016 (2015 – nil).

Notes to the Condensed Financial Statements

For the half year ended 30 June 2016

1. Mapfe Middlesea p.l.c. is authorized by the Malta Financial Services Authority to carry on long term and general business of insurance under the Insurance Business Act, 1998.

2. Basis of preparation

These condensed financial statements are being published in accordance with Chapter 5 of the Listing Rules of the Listing Authority – Malta Financial Services Authority and the Prevention of Financial Markets Abuse Act 2005. These statements have been extracted from the Group’s unaudited financial statements as approved by the Board on 22 July 2016 and have been prepared in accordance with International Financial Reporting Standards as adopted by the EU applicable to interim financial reporting (IAS34). They do not include all information required for full annual financial statements, and should be read in conjunction with the financial statements for the year ended 31 December 2015. The accounting policies applied in these condensed financial statements are the same as those applied by the group in its financial statements for the year ended 31 December 2015.

Related party transactions with other members of the Mapfre Middlesea Group were at a similar level to the comparable period.

Segmental information

The Group is organized into three geographic segments: Malta, Gibraltar and London. Whilst the Malta segment is involved in general business and long term business, the Gibraltar and London segments are general business segments that are in run-off.

Statement pursuant to Listing Rule 5.75.3 issued by the Listing Authority

We confirm that to the best of our knowledge:

• the condensed interim financial statements for the Group give a true and fair view of the financial position as at 30 June 2016, financial performance and cash flows for the period then ended, in accordance with accounting standards adopted for use in the EU for interim financial statements ( IAS 34 ‘ Interim Financial Reporting’) for the Group; and
• the commentary includes a fair review of the information required in terms of Listing rule 5.75.2.

Martin Galea Alfred Attard Felipe Navarro Lopez de Chicheri
Chairman Director President & CEO