Run-off buyer’s profit before non-controlling interests drops 16%
Bermuda-based run-off buyer Enstar made a profit after tax of $13m in the first quarter of 2013, down 16% on the $15.4m it made in the same period of last year.
The profit was reduced by a combination of a higher tax bill and costs associated with its 7 February acquisition of US insurer SeaBright, which it subsequently placed into run-off.
Enstar’s tax bill increased by $4.1m to $7.8m (Q1 2012: $3.7m) because of higher profits in the company’s taxable subsidiaries.
Salaries and benefit expenses increased by $3.2m to $23.6m (Q1 2012: $20.4m) because of an increase in headcount, mainly because of the SeaBright acquisition.
General and administrative expenses increased $3.1m to $17.9m (Q1 2012: $14.8m), mainly because of operating costs associated with the SeaBright purchase.
Enstar paid $252.1m for SeaBright.
The profit was also hit by a $2.8m increase in foreign exachange losses and a £2.5m drop in net investment income.
Despite the fall in total first quarter profits, the profit attributable to Enstar after excluding profits due to non-controlling interests was up 24% to $12m (Q1 2012: $9.7m).
This was because the profit due to non-controlling interests fell to $1m in the first quarter of 2013 from $5.7m in the same period last year.
The fall was mainly a result of lower earnings in those Enstar companies that have non-controlling interests.