Baldwin reports higher revenue, expects slower organic growth

The Baldwin Group reported double-digit revenue growth in the second quarter, but executives at the brokerage said they expected organic revenues to rise at a slower pace as property insurance rates fall and the economic outlook is uncertain.

Baldwin reported $378.8 million in revenue for the quarter, an 11.5% increase over the same period last year, and up 11% on an organic basis.

Renewal premiums change during the quarter was “muted at 1.3%, reflective of the dramatic reduction in large, cat-exposed coastal property pricing,” said CEO Trevor Baldwin.

Baldwin expects organic growth of mid-single digits for the third quarter and high-single digits for the year, due to the falling premium rates, said Chief Financial Officer Brad Hale.

The company forecasts full-year revenue of $1.5 billion to $1.52 billion, he said.

The company is also seeing “sluggishness” in capital expenditures and construction starts “tied to uncertainty in the broader macro environment,” Mr. Baldwin said.

Baldwin saw a 24% reduction in rate and exposure in its construction practice during the quarter, he said.

“That is a result of slowing project starts showing up in the form of lower project-based revenues,” he said.

The brokerage reported a net loss of $5.1 million for the quarter, down from a $30.9 million loss in the prior-year quarter. Adjusted net income, which excludes amortization, share-based compensation and other one-off payments, increased 22.7% to $49.5 million.

Baldwin paid $57 million in earnouts related to prior acquisitions during the quarter.