FBD shares up, Cairn Homes drop after storm

By Eamon Quinn

FBD and DCC were the big winners among Irish companies listed on stockmarkets yesterday as the insurer appears to have weathered the snowstorm and Storm Emma while DCC’s extensive home heating business was tipped to benefit from the cold disruption across continental Europe.

However, Cairn Homes, which reports its 2017 earnings later today, could be affected by the shutdown of housing sites around the Dublin area, according to a leading analyst.

Its shares dropped 4.6%, significantly paring back gains it had posted since it first listed its shares in Dublin last summer.

Share losses for the airlines such as Ryanair and IAG (the Aer Lingus and BA-owner) performed surprisingly well, suggesting the financial hit from the snow storm may be limited.

FBD chief executive Fiona Muldoon said that though it was too early to assess overall costs for its extensive insurance book in agriculture, farms, and food, as well as SMEs including pubs, that the relatively short period of the bad weather may have helped curtail damage to property and cars.

“There has been a lot of hardship for farmers and they are having a tough time,” she told the Irish Examiner. “The main difference with 2010 was that the duration was relatively short this time,” she said.

FBD shares continued their impressive run, as investors have come to learn that storms may have less effect on insurers than in previous bad weather events.

In the immediate aftermath of Storm Ophelia in October, FBD shares had taken a hit amid fears a surge in claims would derail the insurer’s recovery, said Darren McKinley, senior equity analyst at Merrion Capital.

FBD shares ended 1.6% higher. That helped brings its run to a gain of 55% in the past year. The insurer is now valued at €421m.

DCC shares, which trade in London, rose over 1% because the cold weather in Europe could boost the company, which generates two-thirds of revenues and earnings from its energy operations. Its businesses include large oil and liquefied petroleum gas operations in the UK and Ireland, as well as the rest of northern Europe.

It owns Butagaz and Flogas, as well as Emo Oil and has forecourts in France. The shares have nonetheless fallen by around 4.5% in the past year, valuing the group at €6.57bn.

Mr McKinley said Cairn Homes which reports its 2017 earnings later today could be affected by the shutdown of housing sites around the Dublin area.

With the Irish stock- market closed on Friday because of snow disruption, shares in Ryanair fell over 1% in Dublin as the price caught up with losses in London last week. In London yesterday the shares rose 4%.

Shares in IAG, which also owns Iberia Airline, were little changed in London.

Both airlines reported increased business overall last month. However, overall the airlines weathered the widespread snow disruption at their main bases in Ireland and the UK much better than the snowstorms of 2010.

Ross Harvey, analyst at Davy, said that airline shares were not overly affected by the disruption in what is a less profitable part of the year for airlines.

“If it happened at Easter, it may be a different matter,” he said.