AMP NZ first-half earnings fall on tighter profit margin, shares gain
By Paul McBeth
Aug. 18 (BusinessDesk) – AMP Ltd.’s local unit reported a 32% decline in first-half earnings as the wealth manager and insurer dealt with dwindling profit margins.
The New Zealand financial services unit made a profit of $28 million in the six months ended June 30, down from $41 million a year earlier, the company said in a statement. The shares rose 5.6% to $5.50 on the NZX.
Operating earnings fell 34% to A$21 million, with profit margins cut as the firm made modelling and assumption changes and it made losses in income protection morbidity and annuity mortality premiums.
At the same time, AMP’s local controllable costs rose 8% to A$26 million as it offered support to advisers dealing with the Canterbury earthquakes.
The local firm contributed A$21 million to the A$329 million profit reported by AMP’s financial services units. The AMP group’s net profit fell 18% to A$349 million in the period.
Today’s results were the first to incorporate the Axa businesses, which were it bought earlier this year. The group added A$59 million to the operating earnings, while fund manager AMP Capital Investors injected A$41 million.
Axa’s New Zealand business made a profit of $15 million in the three months ended June 30. That contributed A$12 million to total operating earnings of A$59 million for the unit.
The merger of the Axa and AMP businesses means the wealth manager is the biggest retail fund manager with $25 billion under management, or 21.8% of market share, up from $19.9 million, or 19.1%, a year earlier.