AMP profit tumbles 41% on investment losses

Friday 13th February 2009

AMP posted a 41% slump in annual profit on investment losses and cut its final dividend to preserve cash.

Net income fell to about A$580 million in 2008 from A$985 million a year earlier, the Sydney-based company said in a statement. Profit reflects a A$260 million investment income market adjustment loss. Today's statement is an early heads-up for its formal results announcement on February 19.

AMP plans to pay a final dividend of 16 cents a share, making 38 cents for the full year, less than some investors had been expecting, according to its statement.

"In the current challenging environment, maintaining our balance sheet strength is a key priority and is in the best long-term interest of our shareholders," chief executive Craig Dunn said.

Shares of AMP gained 1.6% to A$5.18 and are down 38% in the past 12 months.

In the fourth quarter, net cash flows were A$252 million, down from A$524 million in the same period of 2007.

AMP said 2008 underlying profit, which strips out investment market volatility, was around A$800 million, a drop from A$882 million in 2007.

By Jonathan Underhill

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