In contrast to earlier posts, this is a beat. They have a $55.00 target. GLTA
TRISURA GROUP LTD.
Q2 Earnings Beat Pre-Reported
Our take: Trisura pre-reported a Q2 earnings beat. The headline operating
EPS figure exceeded our estimate by ~8% to ~14% and may imply better-
than-expected underwriting margins. The company also provided an update
on the program in run-off and quantified the expected magnitude of the
earnings impact in the second half of the year, which did not deviate
meaningfully from our expectations. Importantly, this program will
substantially roll off the books by year-end and thus have no material impact
in 2024 and beyond.
Key Takeaways
• Beat on Q2 operating EPS is pre-announced. Trisura indicated
that it expects Q2 operating EPS to be in the range of $0.53 - $0.56,
which is ~8% to ~14% above our estimate of $0.49. Book value is
estimated to be $530 million (reflecting 3.4% growth sequentially)
and operating ROE is expected to exceed 19%. Although further
detail was not provided, the headline earnings figure compares
favourably to our prior estimate and suggests that underwriting
margins were perhaps stronger than we had forecasted. In any
event, we believed that a string of earnings beats was possible this
year and may help support a recovery in the stock (perhaps once
better clarity is obtained regarding the fallout from the Vesttoo
situation).
• Run-off program update did not deviate meaningfully from our
expectations. Trisura indicated that the program in run-off would
have a positive $5 million after-tax earnings impact in Q2 (consistent
with the prior guidance range of $4 million to $6 million).
Furthermore, the program is expected to have a negative after-tax
earnings impact of $18 million to $23 million in the second half of this
year. This is the first time that Trisura has quantified the earnings
drag from the run-off program for H2, but we were generally
expecting a high single-digit impact on a quarterly basis in the back
half of the year (which is not far off the mark). Substantially all of this
exposure will roll off the books by year-end and thus have no
material impact in 2024 and beyond