Porto Seguro SA booked net income of 269.6 million Brazilian reais for the fourth quarter of 2017, down 11.2% from 303.5 million reais a year earlier.
In reporting the quarterly earnings, the Brazilian insurer noted its results were still affected by the country's severe economic crisis despite the end of the recession in the second half of 2017.
Porto Seguro said "higher criminality in some states, a sharp decrease in interest rates and a competitive environment in the auto segment were challenging for the insurance industry." Still, the company said it increased its main business lines through geographical expansion and financial investments.
Total revenues for the quarter were 4.58 billion reais, up 9% from 4.20 billion for the fourth quarter of 2016, while total expenses went up to 4.36 billion reais, from 4.17 billion reais in the year-ago period.
Net earnings for 2017 reached 1.11 billion reais, up 20.1% year over year, which the company said was boosted by the sale of shares in IRB-Brasil Resseguros SA. Excluding the sale, 2017 earnings would have totaled 982 million reais.
Total written premiums for Porto Seguro were at 3.88 billion reais for the fourth quarter, up 7.7% from the 3.60 billion reais a year earlier.
Nonperforming loans over 90 days reached 4.5% of the portfolio for the quarter, compared to the 6.2% market average, as well as the 5.0% recorded in the fourth quarter of 2016. Meanwhile, revenues from financial and service businesses increased 13% in the quarter mostly due to the growth of credit card and financing products, Porto Seguro said.
Return on average equity was 15.7% for the quarter, down from 19.6% a year earlier while earnings per share reached 83 centavos, down from 94 centavos on Dec. 31, 2016.
As of Feb. 2, US$1 was equivalent to 3.22 Brazilian reais.
