Insurance company AXA Group (AXA) Wednesday reported a sharp decline in profit for the first-half, as revenues dropped, reflecting the impact of adverse market environment and lower management fees.
For the first six months, the company's net income dipped to 1.32 billion euros from 2.16 billion euros in the year-ago period. On a per-share basis, net income plummeted 53% to 0.50 euros from 1.07 euros in the prior year.
The company noted that decline in net income was due to lower adjusted earnings, partly offset by 819 million euros lower negative contribution from change in value of assets and derivatives net of forex and other items, mainly due to credit spread tightening.
Underlying earnings fell to 2.12 billion euros or 0.95 euros per share from 2.77 billion euros or 1.28 euros per share last year, as lower average assets under management negatively impacted underlying earnings in both Life & Savings and Asset Management, together with 1.7 points increase in combined ratio to 98% impacting underlying earnings in Property & Casualty.
For the latest period, adjusted earnings were 1.74 billion euros, 47% lower than 3.29 billion euros a year earlier. Adjusted earnings per share dropped 50% to 0.77 euros from 1.54 euros in the previous year, reflecting lower underlying earnings, lower realized capital gains of 714 million euros and 312 million euros higher impairments net of hedging.
Half-yearly revenues decreased 1.8% to 48.4 billion euros from 49.32 billion euros in the comparable period last year, and the decline was 5.7% on a comparable basis, which was calculated at constant foreign exchange and scope.
Segment-wise, Life & Savings revenues dropped to 30.07 billion euros from 30.83 billion euros on year, hurt by adverse market environment. Property & Casualty revenues were 14.92 billion euros, versus 14.52 billion euros in the preceding year, driven by personal lines, while commercial lines remained stable.
International Insurance revenues grew to 1.73 billion euros from 1.67 billion euros in the prior year, mainly driven by positive business developments in liability and 3% growth in AXA Assistance.
Meanwhile, Asset Mangement revenues fell to 1.5 billion euros from 2.1 billion euros in the previous year, due to 36% reduction in management fees mainly driven by lower average assets under management, unfavorable change in product mix, as well as a reduced contribution from distribution fees.
AXA closed Tuesday's session at $22.09, down $0.2, on a volume of 358K shares.
For comments and feedback: editorial@rttnews.com