Odyssey Re Q3 Results: $18 Million Net Income; $3.8 Million Operating Loss

Odyssey Re Holdings Corp reported third quarter net income of $18 million, or 28 cents per common share, compared to $42.3 million or 65 cents per common share for the quarter ended September 30, 2003. (See also related article on the company’s parent Fairfax Financial).

The announcement noted: “Included in the third quarter 2004 and 2003 net income were net realized capital gains after taxes of $21.8 million and $11.2 million, or $0.34 and $0.17 per common share, respectively. All references to per share amounts in this earnings release are on a diluted basis.”

The company posted an operating loss (which excludes net realized capital gains) after taxes for the third quarter 2004 of $3.8 million, or 6 cents per common share, compared to operating income after taxes of $31.1 million or 48 cents per common share for the third quarter 2003. Operating income after taxes was $70.4 million or $1.08 per common share for the nine months ended September 30, 2004, compared to $80.0 million, or $1.23 per common share, for the same period in 2003.

For the nine months ended September 30, 2004, Odyssey Re reported net income of $136 million, or $2.09 per common share, compared to net income of $201.6 million, or $3.10 per common share for the nine months ended September 30, 2003.. Net realized capital gains after taxes for the nine months ended September 30, 2004 were $65.6 million, or $1.01 per common share, compared to $121.6 million, or $1.87 per common share, for the nine months ended September 30, 2003.

“The net after tax loss from the effects of Hurricanes Charley, Frances, Ivan and Jeanne amounted to approximately $55.7 million in the third quarter,” said the announcement. “The combined ratio for the third quarter 2004 was 106.9 percent, compared to 96.3 percent for the third quarter 2003. For the nine months ended September 30, 2004, the combined ratio was 99.0 percent, compared to 97.2 percent for the comparable period of 2003.”

Commenting on the third quarter and nine month results, President and CEO Andrew A. Barnard stated, “OdysseyRe’s return on equity through the first three quarters stands at 13 percent, despite the unprecedented storm activity in the third quarter. Our diversified platform continues to generate a strong flow of profitable opportunities worldwide.”

The company also noted: “Gross premiums written for the three months ended September 30, 2004 were $754.2 million, compared to $703.0 million for the three months ended September 30, 2003. Net premiums written for the third quarter 2004 were $671.3 million, compared to $582.2 million for the prior year’s third quarter. For the nine months ended September 30, 2004, gross premiums written were $2.0 billion, compared to $1.9 billion for the same period in 2003. Net premiums written for the nine months ended September 30, 2004 were $1.8 billion, compared to $1.6 billion for the same period in 2003.”