AMP lifts first-half earnings

Thursday 19th August 2010

AMP, which was rejected as a suitor for rival AXA Asia Pacific, reported a 4.4% increase in underlying earnings in the first half while saying it remains cautious about the global economic outlook.

Underlying earnings, which strips out adjustments for market volatility, rose to A$383 million in the six months ended June 30, from A$367 million a year earlier, the Sydney-based company said in a statement today.

Net profit, which includes fair value adjustments and accounting mismatches, rose 17.4% to A$425 million.

The wealth management company's A$12.9 billion offer for AXA, which had regulatory approval, was rejected last year and rival bidder National Australia Bank is trying to get a revised proposal past the antitrust regulator.

AMP has instead focused on cost control and lifting sales from existing core operations though chief executive Craig Dunn said Axa is still "strategically attractive."

"We'll continue to act proactively and decisively to reposition the company for growth, capturing the opportunities that will flow from the changing wealth management market and our targeted expansion into Asia," Dunn said today.

Earnings growth was driven by a 16% gain in operating earnings at its AMP Financial Services Contemporary Wealth Management unit, a 39% gain in its AFS New Zealand business to A$32 million and a 2.3% gain to A$44 million for its AMP Capital Investors unit.

Earnings from wealth protection fell 12% to A$73 million and earnings from its Mature business fell 6% to A$68 million.

"While AMP retains a reasonably positive economic outlook for Australia and the Asian region, it continues to be cautious about the global economic outlook, expecting ongoing market volatility and subdued investor confidence," Dunn said.

In New Zealand, the firm kept control of costs, which shrank to A$24 million from A$27 million a year earlier, and benefited from a better claims outcome and changes to the corporate tax rate.

Its return on equity from New Zealand rose to 25.1% from 20.5%.AMP will pay an interim dividend of 15 Australian cents, representing 81% of underlying earnings, from 14 cents, or 77%, a year earlier.

The shares last traded at A$5.35 on the ASX and have shed about a fifth of their value this year.

The NZX-listed shares were unchanged at $6.72. The stock is rated ‘outperform' based on the consensus of 12 recommendations compiled by Reuters. Assets under management slipped about 1% to A$111 billion.

Businesswire.co.nz

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