Reinsurance products and services provider Maiden Holdings, Ltd. (MHLD) Tuesday reported a net profit for the third quarter as compared with a loss in the prior year, benefited primarily by a significant rise in revenues. The company also increased its quarterly cash dividend by 8%.
For the third quarter, the Hamilton, Bermuda-based company's net earnings were $14.99 million or $0.21 per share, compared with a net loss of $27.52 million or $0.46 per share in the previous-year period.
Operating earnings for the period rose to $16.52 million from $15.38 million in the same quarter last year. On a per share basis, operating earnings were $0.23 versus $0.26 last year. Operating results exclude realized investment gains and losses, foreign exchange and other gains, and losses and amortization of intangible assets.
Maiden's total revenues for the quarter surged to $254.06 million from $80.03 million in the third quarter of fiscal 2008.
Net earned premium for the third quarter was $237.35 million compared with $113.60 million in the prior year. Net premiums written were up 95.6% to $221.40 million from $113.19 million a year earlier. Change in unearned premiums for the period was $15.95 million versus $408 thousand in fiscal 2008.
Net investment income for the quarter totaled $16.8 million, up 87% from $9.0 million in the third quarter of 2008. Commenting on the results, president and chief executive officer Art Raschbaum said, "During the quarter, we grew our investment portfolio nearly 20 percent and improved investment income while maintaining our conservative stance."
As at September 30, 2009, shareholders' equity totaled $664.6 million, up from $509.8 million at December 31, 2008, with book value per share of $9.45 compared with $8.61 as of June 30, 2009.
In the three-month period, total expenses incurred by Maiden increased to $228.50 million from $107.19 million in the 2008-year period. The company incurred a one-time cost with regard to amortisation of intangible assets totaling $1.68 million and interest amounting to $9.11 million in the third quarter of 2009.
For the nine-month period, net earnings were $44.34 million or $0.63 per share versus a loss of $1.21 million or $0.02 per share in the comparable period prior year. Operating earnings for the period increased to $47.32 million from $41.53 million in the 2008-year period. Operating earnings per share were $0.68 compared with $0.70 a year ago. Year-to-date revenues rose to $716.97 million from $238.21 million in the previous year.
In addition to this, Maiden also said it has reached an agreement in principal with American Capital Acquisition Corporation regarding a multi-year 25% quota share agreement, which is anticipated to generate more than $200 million in annual revenues.
Maiden stated that the contract will commence in relation with American Capital's proposed acquisition of GMAC's U.S. consumer property and casualty insurance business, which is estimated to occur in the first quarter of 2010 and is subject to regulatory approval.
In a separate press release, Maiden said it has increased its quarterly cash dividend from $0.06 per share to $0.065 per share of common share, payable on January 15, 2010 to shareholders of record as of January 4, 2010.
In Monday's regular trading session, MHLD closed trading at $7.16 per share on the Nasdaq. In the past 52-week period, the shares have been trading in a range of $2.75 to $8.10.
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