More pain for suffering AMP shareholders with the insurer and wealth manager revealing Friday that it suffered a 96% slide in earnings in 2018 (Its financial year ended December 31) and as a result, the board has slashed the final dividend – which will see the full year payout halved.
AMP confirmed it will set aside another $200 million to cover the cost of customer remediation related to issues heard at the banking royal commission.
The company told the ASX it expects net profit for the 12 months to December 31 to be around $30 million, a fraction of the $848 million in 2017.
AMP will slash its final dividend from 14.5 cents to just 4.0 cents, a move likely to anger shareholders who already delivered a first strike on remuneration last year. The interim dividend was cut to 10 cents a share from 14.5 cents in 2017.
The two cuts mean the total payout for 2018 will be 14 cents, just under half the 29 cents a share paid for 2017.
AMP shares fell more than 7% on Friday to end weak at $2.34.
The rotten 2018 result and revelations from the royal commission mean the company likely faces another strike at this year’s annual meeting in may which will, in turn, see a board spill at the meeting.
2018 saw AMP lose its CEO, chairman, several other board members, and some senior executives thanks to disclosures at the royal commission about lying to regulators and charging dead clients for advice.
The full-year results will be issued on February 14 and the company Friday firmed up the pre-tax amounts of $186 million, for remediation program running costs, and $14 million, for lost customer earnings in the second half.
Underlying profit – which ignores one-off items and costs- is estimated to come in at about $680 million, down 35% on 2017’s $1.04 billion.
With the banking royal commission due to issue its final report next month, AMP (and many other financial groups0 face further costs for remediation and repaying illegally charged fees) so the lower profit for 2018 is likely to be followed by more pain this year, and a lower dividend.
