Shares in Brazilian reinsurer IRB jump on Q4 results, 2020 outlook

SAO PAULO, Feb 19 (Reuters) – A share buyback program, a better 2020 outlook and higher fourth-quarter profit helped propel shares in reinsurer IRB Brasil Resseguros SA upward in morning trading in Sao Paulo on Wednesday.

IRB posted on Wednesday net income of 632.1 million reais ($144.52 million) in the fourth quarter, up 69.5% from a year earlier.

Shares in IRB were up more than 4%, at 37.8 reais, posting the best performance in the Ibovespa index.

IRB’s results comes amid volatility created by shortseller asset manager Squadra Investimentos questioning of the reinsurer accounting, in a move that brought shares down nearly 20%.

“The company reported a more detailed management discussions and analysis, which was signed not just by IRB’s top management team, but also by all its board of directors,” Banco BTG Pactual SA’s analysts said ion a note to clients, adding the company also provided more details on balance sheet items.

IRB said it is likely to post a written premium growth in Brazil between 22% and 27% in 2020. Last year, it raised 14.4%.

“The 2020 guidance is constructive, with our sensitivity simulation pointing to R$2.15 billion in earnings at the midpoint of the guidance, implying earnings growth of 31%,” Brasil Plural’s analysts said in a note.

IRB also said it will buy back up to 41,898,920 shares, or 5% of its outstanding shares, by August 2021. ($1 = 4.3739 reais) (Reporting by Paula Laier; Writing by Carolina Mandl; Editing by Steve Orlofsky)

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