Grupo SURA posted consolidated revenues of COP 35.5 trillion and a record operating income of COP 4.6 trillion for 2023

ACTIONS AND INVESTMENTS Financial results Grupo SURA IR SURA Asset Management Suramericana
  • The Company ended the year with an adjusted controlling net income of COP 2.3 trillion[1], (USD 536 million) 11.7% higher than for 2022, thereby complying with the projections presented a year ago. This figure includes adjustments for non-recurring effects in order to obtain a more accurate view of our business performance.
  • The Board of Directors approved a proposed dividend of COP 1,400 (USD 0.3) per share for 2024, 9.4% more than for the previous year. This proposal shall be submitted for the consideration of the Shareholders at their upcoming Ordinary Shareholders' Meeting to be held on March 22.
  • This year, the Company expects to record earnings per share of between COP 12,000 and COP 13,000 (USD 2.8 – USD 3.0). Upon adjusting for the non-recurring effect of the gain on the Nutresa sale, adjusted net earnings per share are estimated to range between COP 4,100 and COP 4,600 (USD 0.9 – USD 1.1), a growth of between 9% and 12% compared to the previous year.
  • As an investment manager, Grupo SURA has drilled down on its integrated handling of its economic, social, human and natural capital for the purpose of advancing on its path towards greater sustainable profitability.

This past Thursday, Grupo SURA reported to the market its consolidated financial results at year-end 2023. Here, it is worth noting that the Company posted total revenues of COP 35.5 trillion (USD 8,215 million), COP 6.3 trillion (USD 1,467 million) more than the previous year, representing a growth of 21.7%; this driven by the uptrend with premiums and fee and commission income, as well as improved investment results. Furthermore, expenses rose at below the increase in revenues, consequently operating income reached a record high of COP 4.6 trillion (USD 1,075 million), for a FY increase of 25.5%.

Therefore, Grupo SURA ended the year with an adjusted controlling net income of COP 2.3 trillion (536 million), for an increase of 11.7% compared to 2022, which was an all-time high for the Company. This figure excludes the non-recurring accounting effects amounting to COP 778 billion (USD 180 million) relating to the Nutresa transaction and Suramericana's divestments in Argentina and El Salvador. On an accounting level, controlling net income ended up at COP 1.5 trillion (USD 356 million) for 2023. This allows us to continue on a path towards further growth and achieve an adjusted return on equity (adjusted ROE [2]) of 10.2%, the highest in the last six years.

 

"For Grupo SURA to consolidate more than COP 35 trillion in total revenues, of which COP 6 trillion corresponded to new revenues compared to the previous year, is a sign of the trust placed in our Companies by both individuals and businesses. Also, a controlling net income of COP 2.3 trillion only goes to reaffirm our robustness together with our commitment to creating added value for our shareholders. Over this past year we continued to strengthen our well-balanced handling of our economic, social, human, and natural capital, this in our role as an investment manager that is deeply committed to a genuine way of doing business," stated Gonzalo Pérez, CEO of Grupo SURA.

In 2023 Grupo SURA received dividends from its investments worth COP 1.8 trillion (USD 418 million), 60.9% more than for the previous year, which is the highest ever recorded by the Company. With this, the Company was able to count on a cash flow that allowed it to pay shareholder dividends worth COP 774 billion (USD 179 million), as well as to reduce its net debt versus dividends received ratio from 3.9 times in 2022 to 3.1 times at the end of 2023.

Based on last year's results and due to the proceeds from the sale of Nutresa, Grupo SURA estimates that at the end of 2024 earnings per share will range between COP 12,000 and COP 13,000 (USD 2.8 – USD 3.0). Upon normalizing the aforementioned non-recurring effect, the Company estimates adjusted net earnings [3] per share of between COP 4,100 and COP 4,600 (USD 0.9 – USD 1.1), which represents an increase of between 9% and 12% year-on-year. Likewise, Grupo SURA expects to receive dividends close to COP 2 trillion (USD 457 million) and to have an operating cash flow close to COP 1 trillion (239 million), which gives it sufficient flexibility to continue meeting its commitments to shareholders and creditors, in addition to maintaining adequate levels of indebtedness.

“In 2024 once the Framework Agreement is completed along with the purchase of an additional stake in SURA Asset Management, we shall have a portfolio that is much more focused on the financial service sector and with the growth opportunities that this implies. At Grupo SURA, we have the strength to continue delivering a growing dividend per share to our shareholders and to continue advancing towards our goal of achieving a return in excess of the cost of capital," stated Ricardo Jaramillo, Chief Business Development and Finance Officer at Grupo SURA.

Proposed Dividend for 2024

The Board of Directors, at a meeting held on February 29, approved to submit to the General Assembly of Shareholders at their upcoming Ordinary Meeting to be held on March 22, a proposed dividend of COP 1,400 (USD 0.3) per share,9.4% higher than last year's dividend. It is worth noting that, over the last six years, the ordinary dividend has presented a compound annual growth rate of 18.0%.

Financial results at subsidiary level at year-end 2023.

Sura Asset Management. At year-end 2023, the Company obtained fee and commission income totaling COP 4.1 trillion (USD 939 million), for a pro forma growth of 12.2%[4]. This, together with the implemented expense controls, allowed controlling net income to reach COP 902 billion (USD 209 million), for a significant increase of 103.9%[5] compared to the end of the previous year. Consequently, adjusted return on equity came to 8.8% thereby exceeding that projected at the end of the previous year.

“2023 was a very positive year for SURA Asset Management and for the savings and investments of our almost 24 million clients throughout the region. The uptrend in revenues and an appropriate handling of expenses, which remained below the average inflation rate throughout the region, allowed us to close the year with a doubling of our controlling net income and with assets under management in excess of COP 672 trillion. These results only go to encourage us to continue focusing on our strategy of creating added value and building financial wellbeing throughout Latin America," stated Ignacio Calle, CEO of SURA Asset Management.

It should be noted that in November 2023 Grupo SURA entered into an agreement to increase its stake in SURA Asset Management to 93.3%, through the purchase of Grupo Bolivar's 9.74% stake in the Company.

Suramericana. At year-end 2023, Suramericana posted written premiums amounting to COP 28.5 trillion (USD 6,610 million), an increase of 14.0% compared to the same period the previous year, 58% of which corresponds to voluntary insurance. The Company's controlling net income ended up at COP 511,701 million (USD 118 million) 4.5% higher than for 2022, despite the loss recorded by the Health Care Provider, EPS SURA (Colombia), which amounted to COP 223,763 million (USD 52 million) at year-end 2023. On the other hand, net income would have stood at COP 631,065 million (USD 146 million), for an increase of 28.9% were we to have excluded the non-recurring impacts associated with the divestitures in Argentina and El Salvador.

“Last year, we continued to develop our value creation strategy by implementing initiatives focusing on sustainable profitability, market development, our operating models, as well as social and planetary health. This has allowed us to consolidate a growth, both in terms of revenues and profitability, based on sustainability, customer loyalty, technical profitability and the operating efficiency of our subsidiaries, which at the end of the year showed sustainable growth, positive results and sound balance sheets," stated Juana Francisca Llano, CEO of Suramericana.

Recent Highlights:

  • Credit risk ratings. In January, the ratings agency Fitch Ratings ratified Grupo SURA's long- and short-term ratings "AAA" and "F1+", respectively for which it gave a stable outlook. Along these same lines, S&P ratified our "BB+” rating and change its outlook from stable to negative, reflecting the effect of the adjustment made to Colombia's sovereign outlook.
  • Further progress made with the Framework Agreement. On February 6, the first part of the share swap took place as contemplated in the Framework Agreement, in which Grupo SURA and Grupo Argos delivered their ownership interests in Nutresa and received in exchange their own shares and those of Sociedad Portafolio.. Furthermore on February 16, an application was filed with the Colombian Superintendency of Finance for conducting a tender offer for shares in Nutresa For more information please click here.
  • Progress made with our de-carbonization strategy. In terms of our natural capital management, in 2023 we finished quantifying our baseline of financed emissions for both Grupo SURA and its subsidiaries so as to move ahead with designing the Group´s de-carbonization strategy.
  • Sustainability. Grupo SURA is among the top 2% of the leading organizations worldwide from the Diversified Financial Service sector with regard to our ESG management, which is why we were included in the 2024 edition of the S&P Sustainability Yearbook. In this same vein, the Company is the only Latin American company from its respective sector to be included in the Dow Jones Sustainability World Index.
  • Well-being and talent management. The Company’s Wellbeing Survey was conducted in 2023, on the perceptions of more than 17 thousand employees of the SURA companies throughout Latin America and which produced a wellbeing score of 92 out of a total of 100. This survey weighs issues such as taking pride in and enjoying your work, job satisfaction as well as stress levels.

[1] Controlling net income is adjusted for the impact of the Nutresa-Grupo SURA share swap and the effects of the divestiture of the insurance operations in Argentina and El Salvador.
[2]Adjusted ROE 2023 Net income is adjusted for the amortization of intangibles as well as the impacts of both the Nutresa - Grupo SURA share swap, as well as the divestitures in Argentina and El Salvador Equity excludes valuations of associates and cross shareholdings between Grupo Argos and Grupo SURA. Likewise, as of the third quarter of 2023, the Nutresa investment was excluded from the equity accounts since it is not being recognized in the equity method.
[3] Earnings normalized for the effects of the sale of Nutresa as part of the transactions contemplated in the Framework Agreement signed by the Company in June 2023.
[4]For comparability purposes, this figure assumes that Protección would have been consolidated as a subsidiary of SURA Asset Management in 2022.
[5]Percentage changes in SURA Asset Management's financial figures exclude exchange rate effects.