Prudential Profit Up; Lifts Dividend

(RTTNews) - UK-based insurer Prudential Plc. (PRU.L, PUK) reported Wednesday higher profit in its fiscal 2015, benefited by growth in premiums with strong performance in all regions, mainly Asia and UK. Further, the company lifted annual dividend, and also announced special dividend.

Looking ahead, the company said it is continuing to make good progress towards 2017 objectives announced in December 2013. Prudential shares were gaining around 2 percent in the morning trading in London.

For the year, profit before tax attributable to shareholders, on IFRS basis, was 3.15 billion pounds, 20 percent higher than 2.61 billion pounds in the previous year. Earnings per share were 100.9 pence, compared to 86.8 pence last year.

Group IFRS operating profit based on longer-term investment returns increased to 4.01 billion pounds.

Total segment profit increased 22 percent year-over-year to 4.68 billion pounds. Asia life and asset management operating profit growth of 17 percent reflected the growing recurring income from life in-force book and higher assets under management in Eastspring.

US life IFRS operating profit was up 10 percent, while UK life profit grew 60 percent, benefited by specific management actions taken to position the balance sheet more efficiently under the new Solvency II regime.

On European Embedded Value or EEV Basis, attributable profit was 3.95 billion pounds, compared to 4.34 billion pounds in the previous year. EEV new business profit of 2.617 billion pounds increased 20 percent primarily reflecting higher overall volumes in Asia and the UK.

Total IFRS revenue, net of reinsurance, meanwhile, decreased to 41.31 billion pounds from 60.13 billion pounds a year ago.

Gross premiums earned was 36.66 billion pounds, compared to 32.83 billion pounds in the previous year. Earned premiums, net of reinsurance, also climbed from last year.

APE sales increased 17 percent to 5.607 billion pounds led by Asia where APE sales were 26 percent higher. In the US, APE sales were 3 percent higher as demand for sales of variable annuities remained strong. In the UK, APE sales grew by 23 percent.

Further, the company said its Board has decided to increase the full-year ordinary dividend by 5 percent to 38.78 pence per share. In addition, the Board has decided to award a special dividend of 10 pence per share reflecting the additional contribution to earnings from the specific management actions in the UK.

From 2016, Prudential will make twice-yearly interim dividend payments to replace final / interim dividend.

Looking ahead, the company said it is continuing to make good progress towards 2017 objectives announced in December 2013.

Cumulative Group underlying free surplus generation from 2014 onwards to December 31, 2017 is projected to be above 10 billion pounds. From January 1, 2014, to December 31, 2015, cumulative Group underlying free surplus generation was 5.6 billion pounds.

In London, Prudential shares were trading at 1,350 pence, up 1.77 percent.