Mapfre Middlesea Plc

Report Publication Announcement • Mar 12, 2020

Registered address Mapfre Middlesea p.l.c., Middle Sea House, Floriana FRN 1442, Malta Postal address P.O. Box 337 Marsa, MRS 1000, Malta T +356 2124 6262 E mapfre@middlesea.com W middlesea.com Registration Number: C5553

MMS/DSD/MSE00320

12 March 2020

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

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The Board of Directors of MAPFRE Middlesea p.l.c., has today, the 12 March 2020, approved the audited financial statements for the financial year ended 31 December 2019. The Board resolved that these audited financial statements be submitted for the approval of the Shareholders at the forthcoming Annual General Meeting (AGM) scheduled for Friday, 24 April 2020. A preliminary statement of the annual results is being attached herewith in terms of the Listing Rules.

Shareholders on the Company's register at the Central Securities Depositary of the Malta Stock Exchange as at close of business on Monday, 23 March 2020 (the record date), will receive notice of the AGM together with a copy of the Annual Report and Financial Statements for the year ended 31 December 2019. The Audited Financial Statements will be available for viewing on the Company's from website (www.middlesea.com) as as a https://www.middlesea.com/insurance-mt/about-us/investors/.

The Board of Directors recommends, for the approval of the payment of a final net dividend of €13,000,000 (2018 - €9,000,000) equivalent to a gross dividend of €0.16745 per share (2018 – €0.11531). The final dividend, if approved at the AGM, will be paid on the 22 May 2020 to the Shareholders on the Company's share register at the Central Securities Depository of the Malta Stock Exchange at the close of business as at the 6 May 2020.

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By Order of the Board

Dr Daphne Sims Dodebier Company Secretary

Floriana Regional Office T: (+356) 2569 4300 E: fro@middlesea.com

Birkirkara Regional Office T: (+356) 2569 4800 E: bro@middlesea.com

Financial Highlights as at the 31 December 2019

Financial highlights of the results for the year ended 31 December 2019 include the following:-

· Total Group profit before tax for the year amounted to €20.08 million as compared to €18.56 million during the previous year with after tax profits at €15.51 million compared to €14.04 million in 2018.

MAPFRE Middlesea p.l.c., as a standalone Company, registered a turnover of €74.38 million in gross premium written, a 6.7% increase over FY2018 registering a marginal decrease in its market leadership share. Technical results remained strong even though experiencing the worst windstorm during February coupled with an increase in the severity of large motor claims particularly those involving foreign nationals. Investment property income and gains helped Investment income to rise above previous year although partly offset by low vields and negative fair value movements on financial investments. Dividends from Group companies increased significantly following the receipt of €12.17 million in special dividend from MAPFRE MSV Life p.l.c. which together with normal dividends reached €18.03 million, up from the €6.84 million in 2018. The Company registered a profit before tax for FY 2019 amounting to €23.82 million, compared to a profit of €11.42 million in FY 2018. Profit after tax increased from €9.43 million in FY 2018 to €21.68 million in FY 2019.

• · The Group's results include the consolidated MAPFRE MSV Life p.l.c. ("MMSV") profit before tax of €14.53 million (2018: €13.70 million). MMSV reported a turnover (including investment contracts without DPF) of €285.73 million compared to €322.72 million in 2018 impacted by a lower demand for single premium business partially offset by a growing demand for longer term regular premium savings and retirement products. MAPFRE MSV's With-Profit Fund returned a gross return of 11.91% reflecting strong gains in most assets in its portfolio. Investment income bounced back strongly from the loss incurred in the previous year with a return of €234.92 million compared to a negative €45.39 million in 2018. The profit after tax consolidated for FY 2019 amounted to €11.75 million (2018: € €10.88 million).
• · Total Group capital and reserves attributable to shareholders (excluding non-controlling interests) as at 31 December 2019 was €89.51 million, compared to €91.67 million as at 31 December 2018.

The Company maintained a strong balance sheet, with its Shareholders' equity amounting to €72.80 million still maintaining a strong regulatory solvency position as at 31 December 2019 under the Solvency II regime.

A final gross dividend in respect of year ended 31 December 2019 of €0.16745 per share amounting to a total dividend of €15,405,828 (2018: €10,608,738) is to be proposed by the directors at the forthcoming annual general meeting. This is equivalent to a net dividend of €0.14130 per share amounting to a total net dividend of €13,000,000 (2018: €9,000,000). This dividend includes a second special dividend of €4.00 million received from MAPFRE MSV in December 2019.

The Board outlook for 2020 is one of cautious optimism where the demand for general business is expected to continue to grow while the demand for the protection savings and investments products in life is expected to remain strong.

The Company will continue forging ahead on the Group Strategic plan of "Transforming to grow and improve profitably". The Client Orientation, the Excellence in Technical and Operational Management and the promotion of our Excellence in Culture and Talent are going to be our main driving forces.

Notice is hereby given that Monday 23 March 2020 is the "record date" for the purposes of Article 53 (2) (b) of the Company's Articles of Association. All shareholders appearing on the Company's Register of Members as at the close of business on Monday 23 March 2020 will receive notice of and be entitled to attend and vote at the Company's Annual General Meeting scheduled for Friday 24 April 2020.

Pursuant to the Malta Stock Exchange Bye-Laws, all shareholders appearing on the Company's Register of Members as at close of business on Wednesday 6 May 2020 will be paid, on the 22 May 2020, the final dividend as approved by the Annual General Meeting.

By Order of the Board

Basis of preparation

These figures have been extracted from MAPFRE Middlesea Group's audited financial statements for the year ended 31 December 2019, as approved by the Directors on 12 March 2020, and are published in terms of MFSA Listing Rule 5.54.

Statement of profit and loss

Non - technical accounts for the year ended 31 December

	Group		Company
	2019 000.3	2018 000.3	2019 00000	2018 Clood
Balance on the general business technical account Balance on the long term business technical account	6,868 15,118	4,988 14,748	6,868 :34	4,988 1,355
Total income from insurance activities	21,981	19,736	7,752	6,343
Other investment income Investment expenses and charges Allocated investment return transferred to	2.079 (433)	1,950 (307)	19,903 (424)	8,374 (303)
the general business technical account Other income Administrative expenses	(1,454) 1,211 (3,308)	(1,228) 1,420 (3,015)	(1,454) (1,958)	(1,228) (1,767)
Profit for the financial year before tax	20,076	18,556	23,819	11,419
Tax expense	(4,571)	(4,521)	(2,137)	(1,991)
Profit for the financial year	15,505	14,035	21,682	9,428
Attributable to: - owners of the Company - non-controlling interests	9,632 5,873	8,594 5,441	21,682	9,428
	15,505	14,035	21,682	9,428
Earnings per share attributable to owners of the Company	10.5c	9.3c

31 December 2019

Statement of comprehensive income

iol the year ended of necember	Group		Company
	2019 C'000	2018 €'000	2019 C'000	2018 00003
Profit for the financial year	15,505	14.035	21,682	9,428
Other comprehensive income:
Items that are or may be reclasssified subsequently to profit or loss
Change in fair value of available-for-sale investments	51	(180)	101	(215)
Available-for-sale investments reclassified to profit or loss	(53)	(42)	(23)	(42)
ltems that will not be reclasified to profit or loss
Re-measurement actuarial (loss)/gain on provision
for other liabilities and charges	(48)	(13)	(48)	(13)
Increase in value of in-force business	10,870	252
Total other comprehensive income, net of tax	10,820	17		(270)
Total comprehensive income for the year	26,325	14,052	21,682	9,158
Attributable to:
- owners of the Company	15,017	8,485
- non-controlling interests	11,308	5,567
Total comprehensive income for the year	26,325	14,052

ltems disclosed in the statement above are disclosed net of tax

Statement of financial position

At 31 December At 31 December 2019 2018 2019 2018 000000 000.3 00000 00000 ASSETS Intangible assets 87,733 72,320 6,934 6,170 Property, plant and equipment 17,711 15,841 2,303 1,972 Rigt-of-use assets 694 570 Investment property 109,583 102,832 16,170 15,364 Investment in subsidiary undertakings 57,214 57,214 26,416 Investment in associated undertakings 27,799 380 330 Other investments 2,230,250 1,965,850 9,855 16,068 Deferred income tax 2,193 2,190 1,218 1,221 Reinsurers' share of technical provisions 30 396 23,464 29,953 22,994 Deferred acquisition costs 7,775 7,142 7,775 7,142 Insurance and other receivables 30,314 28,616 17,353 15,795 Income tax receivable 2,078 2,338 70,987 70,387 27,045 18,438 2,616,125 2,318,779 176,770 162,708 EQUITY Capital and reserves attributable to owners of the Company 89,505 91,673 72,804 68,307 Non-controlling interests 73,684 80,021 Total equity 163,189 72,804 171,694 68,307 33,220 30,968 2,075 2,016 1.074 1.101 1,101 1,074 contracts with DPF 2,337,692 2,049,991 88,166 80,658 45,032 52,692 117 64 845 717 26,440 19,222 11,774 10,519 734 329 133 134 2,452,936 2,147,085 94,401 103,966 2,616,125 2,318,779 176,770 162,708		Group		Company
	Cash and cash equivalents
	Total assets
	LIABILITIES
	Deferred income tax
	Provision for other liabilities and charges
	Technical provisions
	- Insurance contracts and investment
	- Investment contracts without DPF
	Derivative financial instruments
	Lease liabilities
	Insurance and other payables
	Income tax payable
	Total liabilities
	Total equity and liabilities

These condensed financial statements were approved by the Board on 12 March 2020 and were signed on its behalf by:

Martin Galea Chairman

Alfred Attard Director

Felipe Navarro Lopez de Chicheri President & Chief Executive Officer

Statement of changes in equity for the year ended 31 December

GROUP	Attributable to owners of the Company
	Share capital € 000	Share premium account C'000	Other reserves €.000	Retained earnings €.000	Total € 000	Non- controlling interests C'000	Total equity € 000
Balance as at 1 January 2018	19,320	288	31,525	41,343	92,876	80,604	173,480
Comprehensive income Profit for the financial year				8,594	8,594	5,441	14,035
Other comprehensive income: Change in available-for-sale investments' fair values			(179)		(179)		(179)
Available-for-sale investments reclassified to profit or loss			(42)		(42)		(42)
Re-measurement actuarial loss on provision for other liabilities and charges Increase in value of in-force business			126	(13)	(13) 126	126	(13) 252
Total other comprehensive income, net of lax Total comprehensive income			(ลอ) (95)	(13) 8,581	(108) 8,486	126 5,567	18 14,053
Transactions with owners Dividends for 2017				(9,700)	(9,700)	(6,150)	(15,850)
Write-back of prior year dividends Total transactions with owners				11 (9,689)	11 (a'esa)	(6,150)	11 (15,839)
Balance as at 31 December 2018	19,320	638	31,430	40,235	91,673	80,021	171,694
Balance as at 1 January 2019	19,320	688	31,430	40,235	91,673	80,021	171,694
Effect of adopting IFRS 16 Balance as at 1 January 2019 as restated	19,320	688	31,430	(197) 40,038	(197) 91,476	80,021	(197) 171,497
Comprehensive income Profit for the financial year				9,632	9,632	5,873	15,505
Other comprehensive income: Change in available-for-sale
investments' fair values Available-for-sale investments			51		51		51
reclassified to profit or loss Re-measurement actuarial loss on provision			(23)		(23)		(53)
for other liabilities and charges Increase in value of in-force business Total other comprehensive income, net of tax			ર,435 5,488	(48) (48)	(48) 5,435 5,385	5,435 5,435	(48) 10,870 10,820
Total comprehensive income			5,433	9,584	15,017	11,308	26,325
Transactions with owners Dividends for 2018				(17,000)	(17,000)	(17,645)	(34,645)
Write-back of prior years dividends Total transactions with owners				12 (16,988)	12 (16,988)	(17,645)	12 (34,633)
Balance as at 31 December 2019	19,320	633	36,863	32,634	89,505	73,684	163,189

Statements of changes in equity for the year ended 31 December

COMPANY

	Share capital € 0000	Share premium account €.000	Other reserves € 000	Retained earnings € 000	rotal € 0000
Balance as at 1 January 2018	19,320	688	35,073	13,757	68,838
Comprehensive income Profit for the financial year				9,428	9,428
Other comprehensive income: Change in available-for-sale investments' fair values			(215)		(215)
Available-for-sale investments reclassified to profit or loss			(42)		(42)
Re-measurement actuarial loss on provision for other liabilities and charges				(13)	(13)
Total other comprehensive income, net of tax			(257)	(13)	(270)
Total comprehensive income			(257)	9,415	9,158
Transactions with owners Dividend for 2017				(9,700)	(9,700)
Write-back of prior years dividends Total transactions with owners of the				11	11
company				(9,689)	(9,689)
Balance as at 31 December 2018	19,320	638	34,816	13,483	68,307
Balance as at 1 January 2019 Effect of adopting IFRS 16	19,320	688	34,816	13,483 (197)	68,307 (197)
Balance as at 1 January 2019 as restated	19,320	688	34,816	13,286	68,110
Comprehensive income Profit for the financial year				21,682	21,682
Other comprehensive income: Change in available-for-sale
investments' fair values Available-for-sale investments			101		101
reclassified to profit or loss Re-measurement actuarial loss on provision			(53)		(53)
for other liabilities and charges				(48)	(48)
Total other comprehensive income, net of tax	-		48	(48)
Total comprehensive income		-	48	21,634	21,682
Transactions with owners Dividend for 2018				(17,000)	(17,000)
Write-back of prior years dividends				12	12
Total transactions with owners of the company				(16,988)	(16,988)
Balance as at 31 December 2019	19,320	638	34,864	17,932	72,804

Statement of cash flows for the year ended 31 December

	Group		Company
	2019	2018	2019	2018
	C'000	€'0000	000.3	00000.3
Cash flows from operating activities
Cash generated from operations	71,413	165,602	6,425	6,098
Dividends received	13,592	11,219	18,086	7,014
Interest received	25,567	25,363	437	459
Interest paid	(ao)	(52)	(90)	(52)
Income tax paid	(1,952)	(1,659)	(2,019)	(1,776)
Net cash generated from operating activities	108,530	200,473	22,839	11,743
Cash flows from investing activities
Purchase of investment property	(1,307)	(898)	(46)	(91)
Disposal of investment property	11	607	11	5
Purchase of financial investments	(1,230,659)	(1,212,837)
Disposal of financial investments	1,168,582	1,037,916	5,788	3,450
Purchase of property, plant and equipment and intangible assets	(10,424)	(3,629)	(3,497)	(2,058)
Disposal of property, plant and equipment and intangibles assets	500	14	500	14
Net cash (used in)/ generated from investing activities	(73,297)	(178,827)	2,756	1,320
Cash flows from financing activities
Dividends paid to owners of the Company	(16,988)	(9,689)	(16,988)	(9,689)
Dividends paid to non-controlling interests	(17,645)	(6,150)
Cash used in financing activities	(34,633)	(15,839)	(16,988)	(9,689)
Net movement in cash and cash equivalents	600	5,807	8,607	3,374
Cash and cash equivalents at beginning of year	70,387	64,580	18,438	15,064
Cash and cash equivalents at end of year	70,987	70,387	27,045	18,438