HCI Group, Inc. (HCI) has reported a 58.45 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $4.61 million, or $0.47 a share in the quarter, compared with $11.09 million, or $1.05 a share for the same period last year.
Revenue during the quarter grew 14.13 percent to $72.37 million from $63.41 million in the previous year period. Net premium earned for the quarter went up marginally by 2.80 percent or $1.73 million to $63.35 million.
Total expenses increase substantially
Benefits, losses and expenses for the quarter were at $66.47 million, or 104.92 percent of premium earned from $45.79 million or 74.30 percent of premium earned in the last year period. Operating income for the quarter was $5.90 million, compared with $17.62 million in the previous year period. Net investment income was at $3.09 million for the quarter, up 138.75 percent or $1.79 million from year-ago period. Meanwhile, income from fees and commission for the quarter declined 7.07 percent or $0.07 million to $0.95 million.
"Despite approximately $21 million of losses and expenses related to Hurricane Matthew, we produced profitable results for the fourth quarter of 2016 ��" our 37th consecutive profitable quarter," said Paresh Patel, the company’s chairman and chief executive officer. "A multitude of factors contributed to our fourth quarter profit, including continued strong operating performance by our core insurance business, lower reinsurance costs, one real estate related gain and improved investment income, all of which resulted from our long-term strategic plans to manage our risks, manage our costs and expenses, diversify our business operations, develop and deploy new technologies, maintain a strong balance sheet and pursue accretive growth opportunities as they arise. We continue to focus on the bottom line rather than the top line."
Liabilities outpace assets growth
Total assets increased 5.19 percent or $33.08 million to $670.06 million on Dec. 31, 2016. On the other hand, total liabilities were at $426.32 million as on Dec. 31, 2016, up 6.78 percent or $27.05 million from year-ago. Return on assets stood at 1.13 percent in the quarter, down 1.04 from 2.17 percent in the last year period. At the same time, return on equity was at 1.89 percent in the quarter, down 2.77 from 4.67 percent in the last year period.
Investments increase substantially
Investments stood at $298.73 million as on Dec. 31, 2016, up 28.26 percent or $65.82 million from year-ago. Meanwhile, yield on investments went up 48 basis points to 1.03 percent in the quarter. Total debt was at $138.86 million as on Dec. 31, 2016, up 7.29 percent or $9.43 million from year-ago. Shareholders equity stood at $243.75 million as on Dec. 31, 2016, up 2.53 percent or $6.02 million from year-ago. As a result, debt to equity ratio went up 3 basis points to 0.57 percent in the quarter from 0.54 percent in the last year period.
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