AXA Asia Pacific doesn’t see much improvement in the second half of the 2009 financial year after a 13% fall in operating earnings for the six months to June.
The French controlled wealth manager and insurer sees the tough market conditions continuing to impact the company for some months to come
"The impact of the global financial crisis has been profound and it has clearly had a significant effect on the broader economy," AXA Asia Pacific chief executive Andy Penn said in yesterday’s statement and profit announcement.
"As we foreshadowed, 2009 has been very difficult so far and it looks like it will continue to be so.
"The significance of the market falls can be seen in the reduction in our average funds under management and advice, which for this half were down 26 per cent on the same period last year.
"Needless to say this has had a material impact on our revenues,” Mr Penn said.
"Whilst all markets have been affected by the global financial crisis, the economies in Asia, from where we derive approximately two thirds of our earnings, are faring better than in many OECD countries," Mr Penn said.
"Whilst understandably some of the performance is lower than the same period in 2008, when one considers the severity of the market downturn, these are strong results."
The group said investment earnings for the half came in at $55.4 million, against a loss of $140.4 million a year ago.
In Australia, operating earnings fell 47% at $75 million, reflecting the reduced average funds under management, while operating profit from New Zealand fell 39%.
"New Zealand has continued to be a very difficult market," the company said.
"In the first half of 2009 two thirds of our operating earnings came from our investments in Asia.
"With the breadth and strength of our operations in the region, prospects for longer-term growth remain strong.”
“We also ended the period with a strong capital position as demonstrated by total assets in excess of our regulatory capital requirements of $1.45 billion and a gearing ratio of 30 percent well below our target range of 40-50 percent,” he said.
Hong Kong operating earnings rose 1% to $A148 million with funds under management rising 9%.
The group’s share of operating earnings from Southeast Asia was up 10% on year at $17.2m.
Interim dividend is being maintained at 9.25 cents a share.
Topline profit rose 187% to $270.4 million for the six months, compared with a profit of $94.2 million in the first half of 2008.
Profit after tax, before investment experience and non-recurring items was down 18% to $267.0 million (2008 – $324.6 million).
The net profit figure jumped because of the damage to its earnings and investments a year ago by the slump in equity markets.
Funds under management, which have been buffeted by the plunge in equity markets, dropped 10% to $75.72 billion as of June 30, from $83.86 billion a year before.
The shares rose 3.9%, or 17 cents to $4.49 on a day when the overall market was marginally lower.
