AMP returns to profit in first half

  • Business
  • Thursday, 19 Aug 2004

SYDNEY: Australian financial services group AMP Ltd reported yesterday a return to profit in the first half this year after cutting loose its loss-making British insurance operations. 

In the six months ended June 30, the company made a net profit of A$378mil, against a loss of A$2.16bil a year earlier. 

AMP's latest result beat market expectations that averaged A$325.4mil. 

The company attributed the profit to improved cash flows and investment income and a continued reduction in costs. 

AMP chief executive Andrew Mohl was upbeat on the prospects for the life insurer and fund manager and said that it had made “encouraging progress'' in its first six months since the demerger from Britain-based insurer HHG. 

The company spun off HHG in December to refocus on interests in Australia and New Zealand. 

Andrew Mohl

The half-year profit comes after AMP recorded a loss of A$5.54bil last calendar year – the second biggest net loss in Australia's corporate history. 

“AMP is now a much more straight-forward business with growth opportunities which remain attractive in the medium term,'' Mohl said. 

He added that the company planned to reward its shareholders. 

“While the timing and quantum have yet to be determined, AMP is likely to return capital to shareholders in one form or other over the next year,'' he said. 

AMP had yet to decide how it would return capital to shareholders aside from yesterday's decision to lift its dividend payout ratio to 75% from 60%, Mohl said. 

“(Calendar) 2005 is also likely to see a capital return to shareholders in addition to the 75% payout policy, but the form, quantum and timing have yet to be determined,” he told a media briefing after announcing the group's first-half results. 

That lifted its interim dividend to 13 Australian cents a share from last year's seven cents. 

Mohl also said that the group would continue to monitor French financial services giant AXA SA's plans to buy out its Australia-listed regional subsidiary AXA Asia Pacific Ltd for any potential opportunities that threw up, but declined to comment further. – Agencies 

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