Prudential FY13 Operating Profit Up, Lifts Dividend

(RTTNews) - UK insurer Prudential Plc (PUK, PRU.L) Wednesday reported a sharp fall in full-year 2013 profit, as total revenues declined with a drop in investment return. Earned premiums, however, increased from last year. Operating profit was up with strong Asia operations. The directors have also recommended a higher dividend.

Looking ahead, the firm believes that it is well positioned to continue to deliver good value to customers and attractive returns to shareholders.

Tidjane Thiam, Group chief executive stated, "We have now met all six of the 2013 'Growth and Cash' objectives we set ourselves in 2010...We remain confident that our Asian business is well positioned and offers a compelling opportunity to deliver long-term value both for our customers and for our shareholders."

Group IFRS operating profit was 2.95 billion pounds, up 17 percent from last year.

In 2013, Asia IFRS operating profit increased 16 percent to 1.08 billion pounds, while new business profit was up 15 percent to 1.46 billion pounds. Total US operating profit was 1.30 billion pounds, an increase of 30 percent over 2012. The UK showed a resilient performance with operating profit of 735 million pounds.

New business profit was up 16 per cent to 2.84 billion pounds, mainly due to 15 percent growth in Asia. APE sales increased 5 percent to 4.42 billion pounds, led mainly by the firm's Asian business.

For the full year, pre-tax profit attributable to shareholders, on IFRS basis, fell to 1.64 billion pounds from 2.75 billion pounds in the prior year. On a per share basis, earnings were 52.7 pence, down from 85.0 pence per share reported in 2012. The firm has adjusted its prior-year results.

Total revenue, net of reinsurance, for the year dropped to 52.38 billion pounds from 54.44 billion pounds a year earlier.

Earned premiums, net of reinsurance increased to 29.84 billion pounds from 28.62 billion pounds in the preceding year. Meanwhile, investment return declined to 20.35 billion pounds from 23.93 billion pounds last year.

In addition, the company said its directors have recommended a final dividend of 23.84 pence per share, up from 20.79 pence paid last year, which will bring the total dividend for the year to 33.57 pence, representing an increase of 15 percent over 2012.

The board also proposed to rebase the full year dividend upwards by 4.38 pence, due to the strong and sustained operational and financial performance of the Group.

Separately, Prudential announced that it has entered into a new agreement with Standard Chartered Plc to expand the term and geographic scope of their strategic pan-Asian bancassurance partnership.

Prudential said the new 15-year agreement, which covers 11 markets and will commence on July 1, 2014, deepens a relationship that was first established in 1998.

In London, Prudential shares are currently trading at 1,416 pence, up 55 pence or 4.04 percent, on a volume of 2.95 million shares.