Executives at Genworth Financial Inc. say that the company still needs to come up with $600 million in cash to handle debt obligations coming due in May, but that the company did well in 2017.
Thomas McInerney, who has been the Richmond, Virginia-based insurer’s president since 2013, told securities analysts Wednesday that he believes the company has been moving in the right direction..
“We returned to profitability,” McInerney said. “We generated solid operating results, particularly at our global mortgage insurance platform, and we made significant progress on our multi-year long-term care insurance premium rate action plan.”
McInerney talked about Genworth’s performance, and future, during a conference call the company held to go over earnings for the fourth quarter of 2017, and for the full year.
Genworth has been a major seller of life insurance, annuities, long-term care insurance (LTCI) and mortgage insurance. The company is reporting $265 million in net income for the fourth quarter on $1.7 billion in revenue, compared with a $63 million net loss on $2.2 billion for the fourth quarter of 2016.
(Related: Genworth Faces Deal Resistance in Delaware)
Genworth has posted a link to a recording of the call here.
China Oceanwide Holdings Group Ltd., a Chinese real estate development and financial services company, agreed to acquire Genworth in October 2016. In 2017, because of deal-related concerns, Genworth skipped holding its usual quarterly earnings calls.
For the latest quarter, McInerney said, Genworth held an earnings call because it wanted to address delays in the China Oceanwide deal closing and other important issues.
For five highlights from the conference call, read on.
(Photo: Allison Bell/TA)
1. Many jurisdictions have already approved the China Oceanwide deal.
McInerney said that Genworth will probably use new secured debt to make the debt payments it will have to make in May.
McInerney said Genworth is facing a China Oceanwide deal approval delay in Delaware as well as a delay related to data security concerns at the Committee on Foreign Investment in the United States, a federal national security deal review agency.
But McInerney also listed some of the many regulators that have approved the China Oceanwide deal.
“We have made significant progress across the necessary regulatory approval processes,” McInerney said.
The list of regulators that have blessed the deal includes the insurance regulatory agencies in North Carolina, South Carolina, Vermont and Virginia, McInerney said.
2. Genworth believes its Delaware life unit is worth about $700 million.
McInerney said that Genworth tried hard to sell a major, Delaware-based life insurance unit, Genworth Life and Annuity Insurance Company, in 2015.
Those efforts suggest that GLAIC has a fair market value of $700 million, McInerney said.
Delaware regulators have independent advisors who think GLAIC is worth more than that, based on a cash-flow analysis, McInerney said.