Profits soar for French insurance group AXA

6th August 2004, Comments 0 comments

PARIS, Aug 6 (AFP) - French insurance group AXA reported Friday a nearly seven-fold rise in first-half net profit to EUR 1.444 billion (USD 1.743 billion) from a year ago, and said the acquisition of US group MONY would boost earnings next year.

PARIS, Aug 6 (AFP) - French insurance group AXA reported Friday a nearly seven-fold rise in first-half net profit to EUR 1.444 billion (USD 1.743 billion) from a year ago, and said the acquisition of US group MONY would boost earnings next year.

And AXA, a leading world insurer, said it would offer about AUD 3.1 billion (USD 2.17 billion) to buy the remaining 48.3-percent stake in Australia-listed AXA Asia Pacific it does not already own as it seeks to raise its profile in the region.

Group net profit rose 590 percent in the first six months of 2004 - 621 percent, adjusted for currency fluctuations - and net operating earnings rose 32 percent to EUR 1.436 billion, beating the consensus analyst forecast of EUR 1.3 billion.

Sales in the first six months of 2004 slipped to EUR 37.306 billon from EUR 37.454 in the same period the previous year.

Key to the strong results was a 40-percent gain in property and casualty operations.

The property and casualty division result was spurred by a 2.3-percentage point improvement in the combined ratio to 99.4 percent, with underlying earnings at the division at EUR 562 million compared with EUR 402 million last year.

Underlying earnings by the life and savings division rose by 25 percent to EUR 848 million in the first six months.

The better than expected performance was well-received by analysts but the price of shares in AXA fell by 1.31 percent in initial trading to EUR 16.56 in line with bearish sentiment on the French market due to rising oil price concerns.

The CAC 40 index was off 1.34 percent.

One analyst who declined to be named commented: "AXA has published excellent results in all areas and the purchase of MONY offers strong potential for synergies."

Another commented: "AXA is out of luck. It publishes very good results on a day when everything is coming unstuck."

The company said it expected the acquisition of the US financial services and brokerage firm The MONY Group to add USD 170-195 million to the group's underlying net earnings in 2005.

It said the integration process was moving ahead in line with plans, and that "expected expense savings and underlying earnings forecasts are in line with assumptions made at the time of the acquisition."

The company gave no detailed outlook for the full-year 2004, but it said it expected the current market environment to support a "continued favourable trend in unit-linked sales and, more generally in life and savings and asset management activities.

It also said it expected new product launches in the second half to gradually improve life premium growth.

Net inflows in asset management should improve over the second half, it added.

For property and casualty operations, the insurer said it expected "the continuation of the positive trends experienced in the first half."

© AFP

Subject: French news

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