Prudential says first-half profit up 8%; warns of persistent COVID woes




  • In Business
  • 2022-08-10 04:21:06Z
  • By Reuters
 

By Selena Li

HONG KONG (Reuters) -Prudential Plc posted on Wednesday a rise of 8% in its first-half operating profit, but the Asia-focused insurer warned of challenging conditions for the rest of the year as COVID curbs persist in some markets.

Adjusted operating profit from continuing operations of the London and Hong Kong dual-listed company was $1.66 billion for the period, up from $1.57 billion a year earlier, it said in a statement.

That figure was lower, however, than an average profit of $1.68 billion from 17 analysts in an estimate compiled by the company.

Annualised premium equivalent (APE) sales, a gauge of insurance sales in annualised metrics, was up 9% to $2.2 billion in the period.

"We achieved stronger APE sales growth in the second quarter as conditions started to normalise in most markets," the group's chief executive, Mark FitzPatrick, said in the statement, referring to sales recovery from disruptions due to COVID-19.

Hong Kong-listed shares of Prudential were down 0.1% in the afternoon trade, while the benchmark index stayed flat.

"Although there are signs that COVID-19-related impacts in many of our markets are stabilising, over the remainder of the year we expect that operating conditions may continue to be challenging," he said.

Rising interest rates, and weak sales in Hong Kong, as well as greater sales through more expensive banking partners also squeezed its new business margin by 5%, to $1.1 billion.

APE sales in Hong Kong, where COVID curbs remain strict despite recent easing, contracted 10% in the first six months.

"Considerable macroeconomic volatility ... and material increases in government bond yields and widening corporate bond spreads", weighed the insurer's balance sheet, FitzPatrick added.

Its asset management arm, Eastspring, booked a drop of 15% in operating profit, due to investment losses.

In May, the British insurer appointed former Manulife Asia chief Anil Wadhwani as its next chief executive, to take over in February 2023, in the pivot to an Asian focus.

Prudential started life in London in 1848 and has undergone a transformation in recent years, splitting off its British and European unit M&G in 2019 and hiving off U.S. business Jackson last year.

(Reporting by Selena Li; Editing by Tom Hogue and clarence Fernandez)

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