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Tawa’s shares climb after 2010 results

UK-listed run-off firm Tawa's 2010 annual results were well received by investors, with its share price rising more than 5 percent since they were published on 25 March.

However, the figures painted a mixed picture as the company moves from its origins as a run-off acquirer and investor to a more balanced and diversified insurance portfolio.

Profit from continuing operations for the year was $8.6mn, up from a loss of $0.9mn in 2009. However profit attributable to shareholders declined to $1.8mn from $11.2mn a year earlier.

The decline was driven by a $6.8mn loss in Tawa's discontinued operations, down from a profit of $12.1mn in 2009. A large portion of these losses was driven by a $2mn reserve strengthening in its discontinued PX Reinsurance Company (PXRE) and a further $4mn of foreign exchange losses.

While PXRE's losses are significant to the firm's yearly balance sheet and cash generation, Tawa also points out it has accumulated $33mn in net asset value from purchasing the firm.

Gilles Erulin, Tawa's chief executive, said it was difficult to judge the group's results as it moved towards a more diverse insurance portfolio, but claimed Tawa's acquisitions and development have made it ready to bloom.

The run-off specialist extracted $47mn from its risk carriers, using $12mn of this to repay the debt it accrued on the purchase of PXRE. This was up from the $40mn it extracted in 2009.

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