Stewart(US:STC)2023-08-08 18:01Financial Performance - Total operating revenues for Q2 2023 were $538.1 million, a decrease of 36.6% compared to $849.2 million in Q2 2022[11]. - Net income attributable to Stewart for the first half of 2023 was $7.6 million, down 36.4% from $119.6 million in the same period of 2022[11]. - Basic earnings per share attributable to Stewart for Q2 2023 was $0.58, a decline of 74.8% from $2.28 in Q2 2022[11]. - Consolidated revenues for the company were $549.2 million in Q2 2023, down from $844.1 million in Q2 2022, reflecting a 35% decline[50]. - Total revenues for the title segment decreased by 39% to $466.7 million in Q2 2023 from $761.1 million in Q2 2022, primarily due to declines in transaction volume[53]. - The real estate solutions segment reported a 14% decrease in operating revenues to $71.4 million in Q2 2023 compared to $82.9 million in Q2 2022, attributed to lower transaction volumes due to elevated interest rates[56]. Cash and Investments - Cash and cash equivalents decreased to $190.0 million as of June 30, 2023, from $248.4 million at the end of 2022, representing a decline of 23.4%[13]. - The company reported a cash used by operating activities of $16.0 million for the first half of 2023, compared to cash provided of $118.2 million in the same period of 2022[14]. - Total cash and investments as of June 30, 2023, amounted to $896.8 million, with $497.5 million held in the United States[90]. - Net cash used by operations in the first six months of 2023 was $16.0 million, a significant decrease from net cash provided by operations of $118.2 million in the same period in 2022[98]. - Total proceeds from securities investments sold and matured were $94.7 million in the first six months of 2023, compared to $52.3 million in the same period in 2022[99]. Liabilities and Equity - Total liabilities decreased to $1.31 billion as of June 30, 2023, down from $1.37 billion at the end of 2022, a reduction of 4.1%[13]. - Total stockholders' equity attributable to Stewart was $1.36 billion as of June 30, 2023, slightly down from $1.37 billion at the end of 2022[13]. - The balance of total equity as of June 30, 2023, was $1.366 billion, a decrease from $1.370 billion at December 31, 2022[15]. - Total debt and stockholders' equity were $445.0 million and $1.37 billion, respectively, as of June 30, 2023[101]. Expenses - Employee costs for Q2 2023 were $182.7 million, a decrease of 13.1% from $210.2 million in Q2 2022[11]. - Employee costs decreased by 13% to $182.7 million in Q2 2023, representing 33.9% of operating revenues[72]. - Consolidated employee costs decreased by $27.6 million, or 13%, in Q2 2023 compared to Q2 2022, and by $62.0 million, or 15%, in the first six months of 2023 compared to the same period in 2022[76]. - Consolidated other operating expenses declined by $32.7 million, or 20%, in Q2 2023 and by $101.7 million, or 29%, in the first six months of 2023 compared to the same periods in 2022[79]. Investment Performance - The company reported a net realized and unrealized loss of $2.9 million in the first half of 2023, compared to a loss of $7.8 million in the same period of 2022[11]. - The company recorded net investment gains on equity securities of $1.988 million for the three months ended June 30, 2023, compared to a loss of $9.366 million in the same period of 2022[35]. - The company reported realized gains of $0.278 million and realized losses of $3.430 million for the three months ended June 30, 2023[33]. - The net unrealized investment gains for equity securities held as of June 30, 2023, were $13.6 million, down from $19.2 million as of December 31, 2022[25]. - The company reported net unrealized investment gains of $1.2 million in the first six months of 2023, compared to net unrealized investment losses of $32.9 million in the same period in 2022[105]. Market Conditions - Single-family mortgage originations decreased by 34% to $450 billion in Q2 2023, with refinancing transactions down by 58% and purchase transactions down by 25%[65]. - Existing home sales in June 2023 were 4.2 million units, a decrease of 19% year-over-year, primarily due to elevated mortgage interest rates[64]. - The average 30-year fixed interest rate increased to 6.5% in Q2 2023, compared to 5.3% in Q2 2022[65]. - Closed orders for refinancing decreased by 53% to 10,674 in Q2 2023, while total closed orders fell by 29% to 60,246[68]. Dividends and Shareholder Returns - The company declared dividends on common stock of $0.90 per share for the six months ended June 30, 2023, totaling $24.983 million[15]. - The company paid total dividends of $24.5 million ($0.90 per common share) in the first six months of 2023, compared to $20.3 million ($0.75 per common share) in the same period in 2022[102]. - Book value per share was $49.82 as of June 30, 2023, down from $50.21 as of December 31, 2022[117].