Fernando Mata (Finance Officer): “We will return to the pre-pandemic dividend, supported by the improved result”
The first quarter numbers are encouraging. The impact of Covid on the insurance industry and, specifically, on MAPFRE’s accounts, has diminished considerably. MAPFRE’s attributable profit in the first six months of this year totaled 364 million euros – a 34.5% increase compared to the same period last year. This trend will allow for recovering pre-pandemic stockholder remuneration, according to a statement yesterday by Fernando Mata, CFO and Member of the Board of MAPFRE. “Our commitment to the shareholders remains firm, and we aim to return to past dividend levels, that is, 14.5 cents a share, provided our profit levels allow,” stated the senior officer during the third virtual meeting with more than 190 registered individual shareholders. He noted that profit, apart from non-recurring income, is expected to surpass 700 million euros.
MAPFRE has been carrying out this exercise in transparency with individual shareholders since 2017, but it has been held online in recent quarters owing to the pandemic. The Group has held more than ten such meetings in the past four years, both online and in person in Madrid and Barcelona. Yesterday, in addition to Mata, Felipe Navarro, Manager of Capital Markets and of Investor Relations and Cash, reported the economic figures of the latest results and José Luis Jiménez, Group Chief Investment Officer of MAPFRE, presented all the investment initiatives with environmental, social and governance (ESG) criteria of MAPFRE AM, the Group’s management company.
In particular, Mata emphasized not only the importance of the financial dividend, but also the Group’s commitment to sustainability. “For us, it is very important to generate both wealth and a social dividend.” Specifically, the insurance company approved its 2019-2021 Sustainability Plan, a road map with more than 30 objectives to advance in ESG. The line of action encompasses areas such as the struggle against climate change, the circular economy, transparency and inclusion, among others. At this time, the Group is working on the 2022-2024 Sustainability Plan, which is based on more demanding work and vision.
A question-and-answer session was held at the end of the event, and it centered mainly on three issues. First, the state of the exit agreement with CaixaBank following the absorption of Bankia. Mata noted that the independent expert is working on a valuation of the businesses being transferred and “we expect this to be resolved by the end of the year.” At the same time, he highlighted the impact of rising debt yields and of interest rates. In this regard, Jiménez pointed out that, in any event, this shifting trend caused by the gradual ending of monetary policy measures will have a positive impact on the balance sheet. “It is likely that bond yields will see upside movement in the next few quarters. It would not be surprising to see the 10-year Spanish bond at about 2% within the next six to nine months. It is a very positive scenario for insurance companies, and especially for us, when 80% of the balance sheet is exposed to fixed income,” he explained.
In addition, the market value being attributed to MAPFRE’s business was being called into question. “Our net asset value stands at 8.5 billion euros, so our stock market value falls far short of that, despite the gains in our share price this year. Consequently, markets are still not taking account of MAPFRE’s potential and equity position,” Mata concluded.