Profits tumble 89% at insurer Aviva

4th August 2011, Comments 0 comments

British insurer Aviva said on Thursday that net profits slumped 89 percent in the first half on exceptional charges, but its underlying earnings rose and its shares jumped thanks to a dividend hike.

Profit after tax stood at £125 million ($204 million, 143 million euros) in the six months to the end of June, Britain's second biggest insurer after Prudential said in a results statement.

That compared with net profit of £1.105 billion in the equivalent period during 2010.

Aviva said the plunge in profits was caused by charges linked to Dutch group Delta Lloyd, in which it sold a 15-percent stake in April, cutting its shareholding to 43 percent.

Operating profit, earnings before tax and interest charges, rose five percent to £1.34 billion during the reporting period.

The operating figure, which is keenly watched by the market, beat analyst expectations for underlying profit of £1.28 billion, according to a poll by Dow Jones Newswires.

Aviva's share price rose 1.43 percent to 380.17 pence on London's declining stock market, after the company lifted its interim shareholder dividend by five percent to 10 pence a share.

The group added that its sales declined by nine percent to £16.5 billion in the first six months, hit by the divestment of assets.

Aviva agreed in June to sell its British roadside rescue division RAC to private equity firm Carlyle for £1.0 billion, as it sought to focus on core insurance and savings businesses in priority markets.

Aviva is the world's sixth biggest insurer, with more than 53 million customers and 45,000 employees worldwide.

© 2011 AFP

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