Insurer Prudential says 2013 net profits tumble - Capital Business
Connect with us

Hi, what are you looking for?

Insurer Prudential posts surging profits /AFP

World

Insurer Prudential says 2013 net profits tumble

Earnings after taxation sank to £1.346 billion in 2013 on short-term fluctuations in investment values, Prudential said in a results statement/AFP

Earnings after taxation sank to £1.346 billion in 2013 on short-term fluctuations in investment values, Prudential said in a results statement/AFP

LONDON, March 12 – British insurance giant Prudential said on Wednesday that net profits slumped by nearly 40 percent last year, as it suffered from turbulence in emerging markets.

Earnings after taxation sank to £1.346 billion in 2013 on short term fluctuations in investment values, Prudential said in a results statement.

That compared with net profit of £2.163 billion in 2012.

The group added however that operating profit, or earnings before tax and interest payments, rose 17 percent to £2.954 billion.

Total sales meanwhile grew by 5.4 percent to £4.423 billion last year, boosted by Asia.

“The group has delivered a strong performance in 2013,” said chief executive Tidjane Thiam in the earnings release.

He added: “Our focus on execution across our geographic markets of Asia, the US and the UK has delivered profitable growth and increasing cash generation.”

He cautioned however that the outlook was clouded by the impact of the US Federal Reserve’s stimulus tapering particularly on emerging markets.

“Looking ahead, we believe that the global economic outlook is improving,” Thiam said.

“However, investment markets are impacted by short-term volatility as the market adjusts to policy normalisation in the US.

Advertisement. Scroll to continue reading.

“The macro-economic adjustments that we are seeing in emerging markets, partly driven by the return of robust US growth, are ultimately a net positive for these countries, the global economy and Prudential.”

The insurer also recommended increasing its shareholder dividend by 15 percent to 33.57 pence per share.

The news sent the group’s share price soaring 3.80 percent to 1,412.6 pence in morning deals, bucking London’s FTSE 100 index which was down 0.76 percent at 6.635.09 points.

“We have seen some aggressive weakness in emerging markets (EM) that have had a negative effect on profitability,” said Atif Latif, director of trading at Guardian Stockbrokers in London.

“Net (profit) is down with the losses in EM but we remain convinced that strong cash generation and increased dividend payouts will attract more money into this sector and in particular Prudential,” Latif told AFP.

Advertisement

More on Capital Business