How did COVID-19 affect Aflac, Synovus, Global Payments in Q1 2020? Here are the finances
Aflac, Global Payments and Synovus have all reported their financial results following the end of the first quarter on March 31, 2020.
The novel coronavirus continues to affect these businesses, with many feeling the impact of the pandemic earlier this year.
Here’s what you need to know about the Columbus-affiliated companies and their finances.
Aflac
Aflac Incorporated, a Fortune 500 company and insurer based in Columbus, reported a Q1 profit of $566 million, down from net earnings of $928 million over the same period last year.
Some other key points include:
▪ Q1 2020 total revenues were down. Aflac reported roughly $5.16 billion in 2020 as opposed to roughly $5.66 billion over the same period in 2019.
▪ Total investments and cash as of March 31, 2020, were roughly $136.97 billion, up from about $131.44 billion at the same point in 2019.
In a statement, Aflac Chairman and CEO Daniel P. Amos said it is difficult to predict what effects the COVID-19 pandemic will have on Aflac’s future finances.
“As a result of the COVID-19 pandemic, the Company may also face increased costs associated with claims under its policies, an increased number of customers experiencing difficulty paying premiums, or policies being designated as ‘no lapse’ for periods of time,” the company wrote in its quarterly filing with the Securities and Exchange Commission.
The company reported its unclear how the pandemic will affect their operations in the U.S. and Japan. But the company anticipates their United States segment will be more affected, citing the higher number of deaths and cases here.
“The Company also considers that most Aflac U.S. business customers ... are small businesses who may lack the financial resources to weather an economic downturn, which the Company expects will impact sales throughout and possibly beyond 2020,” according to the filing.
Global Payments
Global Payments, a financial technology services company with dual headquarters in Atlanta and Columbus, reported a Q1 2020 profit of roughly $150.6 million, up from a reported total net income of about $119.2 million over the same period in 2019.
Some other key points include:
▪ Global Payments saw its total revenues increase in Q1 2020 to roughly $1.90 billion compared to roughly $883 million over the same period in 2019.
▪Adjusted earnings per share grew 18% to $1.58, compared to $1.34 in the first quarter of 2019.
The company reported some of its financial increases came from the TSYS merger finalized in September 2019, but some of the increase was offset by the novel coronavirus.
In its quarterly filing with the Securities and Exchange Commission, Global Payments reported that it began feeling the effects of the pandemic in mid-March.
On March 30, the company said salaried employees in the United States and some international locations would take a 10% pay cut while CEO Jeff Sloan would voluntarily forgo 100% of his base salary and 100% of any bonus opportunity for the remainder of the year.
In addition, the company’s Executive Leadership Team would voluntarily take 50% base salary reductions and forgo 100% of any bonus opportunity for the remainder of the year. The Board of Directors waived 100% of their cash retainers for 2020.
”The deterioration accelerated toward the end of March and ... is likely to have a further negative effect on our near-term financial results due to reduced consumer, business and government spending upon which our revenues depend,” the company wrote. “These factors may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the COVID-19 pandemic has subsided.”
Last week, Global Payments announced a deal with Truist to process the bank’s consumer, commercial and small business credit card portfolios.
Synovus
Synovus, the Columbus-based banking and financial services company, reported a Q1 profit of roughly $38.5 million, down from a reported total net income of roughly $120.2 million over the same period in 2019.
Some other key points include:
▪ Total loans for Q1 were roughly $38.3 billion, up from $35.6 billion over the same period in 2019.
▪ Total deposits for Q1 were roughly $39.8 billion, up from $38.1 billion over the same period in 2019.
▪ Total revenues for Q1 were roughly $477.9 million, up from roughly $477.1 million over the same period in 2019.
As of March 31, Synovus reported total assets of roughly $50.6 billion, up from roughly $46.6 billion over the same period in 2019.
The company’s provision for credit losses — an estimation of possible losses that a company might experience due to credit risk — was listed at $158.7 million. That’s up from about $23.6 million reported at the same point in 2019. The increase is “primarily impacted by the significant economic stress due to the COVID-19 healthcare crisis,” the company reports.
Last week, Synovus announced it processed and approved roughly 18,000 Paycheck Protection Program (PPP) loans totaling $2.9 billion as of May 5. In Columbus, the company issued more than 1,000 PPP loans totaling more than $160 million, said spokesperson Lee Underwood in an email.
The Paycheck Protection Program was established through the federal CARES Act for job retention and other related expenses for small businesses, nonprofits and veterans’ organizations affected by the pandemic.
This story was originally published May 12, 2020 at 7:00 AM.