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MH

Maiden Holdings, Ltd. (MHLD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was driven by underwriting income from favorable prior-year loss development ($12.4M), but reported results were negative due to higher non-recurring strategic costs, foreign exchange losses, and sharply lower investment returns; total revenues fell to $14.049M and net loss was $(8.645)M, or $(0.09) per share .
  • Management emphasized the strategic pivot toward a capital-light, fee-based specialty program model via the Kestrel combination, with transactions targeted for Q2 and subsequently completed on May 27, 2025 (MHLD ceased trading; KG listed May 28) .
  • Adjusted book value per share declined to $1.42 (from $1.52 at 12/31/24) while GAAP book value per share decreased to $0.38 (from $0.46); LPT/ADC amortization recognized $5.9M into income and recoveries were $28.2M in Q1, supporting underwriting results despite lower investment income .
  • Investment results dropped to $3.6M (from $17.1M YoY) on reduced fixed income assets, lower loan yield, alternative asset headwinds, and negative equity method pick-ups; management expects stronger Q2 investment gains from post-quarter asset sales .

What Went Well and What Went Wrong

What Went Well

  • Favorable prior period loss development of $12.4M (AmTrust +$7.8M; Diversified +$4.6M) yielded $7.5M underwriting income vs a $(7.5)M underwriting loss in Q1 2024 .
  • LPT/ADC continued to perform: $5.9M deferred gain amortization recognized; $28.2M of recoveries; deferred gain balance remains substantial at $103.968M (to be recognized into GAAP income over time) .
  • CEO tone on strategic execution: “Absent higher expenses related to the Kestrel transaction and a significant weakening in the U.S. dollar... adjusted results returned a profit of $0.6 million… We expect the level of amortization of the deferred gain to increase appreciably during the remainder of 2025.” .

What Went Wrong

  • Total revenues fell to $14.049M (from $28.904M) as net premiums earned declined and investment returns weakened; net loss was $(8.645)M vs $1.459M YoY .
  • Investment results decreased to $3.6M (from $17.1M YoY), with net investment income down to $3.034M (from $7.700M), net realized/unrealized gains down to $3.331M (from $8.750M), and equity method loss of $(2.722)M vs income of $0.606M .
  • Corporate G&A rose to $10.773M (from $8.060M), including $2.8M higher professional fees for strategic initiatives; FX swung to $(7.434)M loss vs $2.053M gain YoY amid USD weakness vs EUR/GBP .

Financial Results

Income and EPS – YoY comparison

MetricQ1 2024Q1 2025
Total Revenues ($USD Millions)$28.904 $14.049
Net (Loss) Income ($USD Millions)$1.459 $(8.645)
EPS (Basic & Diluted, $USD)$0.01 $(0.09)
Net Premiums Earned ($USD Millions)$12.408 $7.684
Net Investment Income ($USD Millions)$7.700 $3.034
Net Realized & Unrealized Gains ($USD Millions)$8.750 $3.331
Equity Method Income/(Loss) ($USD Millions)$0.606 $(2.722)

Segment breakdown – key operating metrics

Metric ($USD Millions)Q1 2024Q1 2025
Diversified Reinsurance – Gross Premiums Written$8.828 $5.016
Diversified Reinsurance – Net Premiums Earned$8.991 $5.000
Diversified Reinsurance – Underwriting Income/(Loss)$(0.272) $2.254
AmTrust Reinsurance – Gross Premiums Written$(0.505) $(0.942)
AmTrust Reinsurance – Net Premiums Earned$3.417 $2.684
AmTrust Reinsurance – Underwriting Income/(Loss)$(7.252) $5.200
Total Underwriting Income/(Loss)$(7.524) $7.454

KPIs and balance sheet snapshot

KPIPrior PeriodCurrent Period
Book Value per Common Share ($USD)$0.46 (12/31/2024) $0.38 (3/31/2025)
Adjusted Book Value per Share ($USD)$1.52 (12/31/2024) $1.42 (3/31/2025)
LPT/ADC Deferred Gain ($USD Millions)$104.955 (12/31/2024) $103.968 (3/31/2025)
LPT/ADC Amortization ($USD Millions)$4.099 (FY 2024) $5.888 (Q1 2025)
LPT/ADC Recoveries ($USD Millions)$20.825 (FY 2024) $28.162 (Q1 2025)
Total Assets ($USD Millions)$1,316.006 (12/31/2024) $1,234.584 (3/31/2025)
Shareholders’ Equity ($USD Millions)$45.193 (12/31/2024) $37.573 (3/31/2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Kestrel combination closingQ2 2025Target Q2 2025 Target Q2 2025; subsequently closed May 27, 2025 (MHLD ceased trading; KG listed May 28) Maintained (then executed)
Investment results trajectoryQ2 2025Not specified“Investment results should increase in the second quarter as certain assets were sold after Q1 leading to increased realized gains.” Raised outlook
Operating expenses (non-recurring)Q2 2025Not specifiedStrategic/transaction costs will recur in Q2 as transactions complete New disclosure
AmTrust collateral funding %2H 2025107.5% Expected reduction to 105% in Q2/Q3 2025 when obligations decline < $500,000 Lowered collateral requirement
Common dividendsQ1 2025None in Q1 2024 None in Q1 2025 Maintained
Share repurchasesAs of May 2025Authorization remaining; program active historically Program suspended pending Kestrel transaction; $68.1M authorization remains Suspended activity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
Strategic pivot to fee-based, capital-light platformBusiness strategy updated in FY2024 10-K; Kestrel transaction announced Dec 30, 2024 Investor update: pivot imminent; transactions targeted for Q2 2025 Accelerating toward execution
Alternative investments and returnsAlt portfolio reduced in 2024; returns moderated Q1 gross returns weaker; expect stronger Q2 from asset sales; pro forma IRR 12.3%, MOIC 1.30x on completed investments Near-term strengthening expected
FX/macrosNot emphasized in Q3/Q4 releases Significant USD weakening drove $(7.4)M FX losses Headwind in Q1
Regulatory/legalOngoing shareholder litigation and proxy-related complaints in Q2 Continued disclosure of legal matters in 10-Q Persistent backdrop
Run-off, LPT/ADC utilizationLPT/ADC amortization began Q4 2024; FY amortization $4.1M Q1 amortization $5.9M; recoveries $28.2M Increasing amortization pace

Management Commentary

  • “Absent higher expenses related to the Kestrel transaction and a significant weakening in the U.S. dollar... adjusted results returned a profit of $0.6 million… We expect the level of amortization of the deferred gain to increase appreciably during the remainder of 2025.” — Patrick J. Haveron, CEO .
  • “Our completed investments have yielded total distributions of $188.1 million… have to date produced an internal rate of return of 12.3% and a multiple of capital of 1.30x… we believe the remainder of this portfolio will continue to deliver the returns we originally set out to achieve.” — Patrick J. Haveron .
  • Combination close: “Today marks the beginning of an exciting new chapter… positions our business to capitalize on favorable market opportunities and accelerates our growth plan…” — Luke Ledbetter, Kestrel Group CEO .

Q&A Highlights

  • MHLD furnished results via press release and an investor update presentation; no formal earnings call transcript was available in the document catalog for Q1 2025 .
  • Investor presentation emphasized transaction timing, expected Q2 investment gains from asset sales, and increased LPT/ADC amortization in 2025 .

Estimates Context

  • Wall Street consensus (S&P Global) for MHLD EPS and revenue was unavailable through our estimates tool at the time of analysis; company communications did not reference external consensus in Q1 materials .
  • Given the lack of published consensus, we cannot assess beats/misses versus estimates for Q1.

Key Takeaways for Investors

  • Underwriting improving: favorable PPD ($12.4M) flipped underwriting from loss to income; LPT/ADC amortization and recoveries are meaningful offsets to run-off volatility .
  • Reported earnings pressured by non-recurring strategic costs and FX; adjusted performance and expected Q2 realized gains suggest near-term improvement contingent on asset sale execution .
  • Balance sheet: adjusted book value per share $1.42 and deferred LPT/ADC gain $103.968M provide economic value support while GAAP book value sits at $0.38; equity $37.6M at quarter-end .
  • Strategic pivot catalyst: Kestrel combination (closed May 27) transforms MHLD into KG — capital-light, fee-based specialty program platform with potential for steadier earnings and optional selective capacity deployment .
  • Watch collateral and regulatory milestones: expected reduction of AmTrust collateral funding to 105% in Q2/Q3 2025 and continued regulatory approvals; legal matters persist but are disclosed as non-material to operations currently .
  • Trading implications: near-term focus on Q2 investment gains realization, FX stabilization, and transaction integration updates; medium-term thesis shifts to fee-based revenue durability and LPT/ADC amortization tailwind to earnings .
Note: All quantitative data are sourced directly from MHLD’s Q1 2025 8-K, investor update, press releases, and 10-Q as cited above.