Prudential plc Half Year 2016 Results

ASIA DRIVES GROWTH AND CASH GENERATION

 

Performance Highlights on a constant (and actual) exchange rate basis

  • Group IFRS operating profit of £2,059 million, up 6 per cent1 (up 9 per cent2)
  • Asia IFRS operating profit of £743 million and free surplus generation3 of £419 million, both up 15 per cent1 (both up 18 per cent2)
  • Asia new business profit of £824 million, up 20 per cent1 (up 24 per cent2)
  • 9 per cent1 increase in US variable annuity IFRS operating profit to £642 million (up 16 per cent2)
  • UK life retail APE sales of £593 million, up 51 per cent, with PruFund sales up 80 per cent to £438 million
  • UK insurance and asset management IFRS operating profit of £730 million4, up 3 per cent
  • 2016 first interim dividend increased by 5 per cent to 12.93 pence per share
  • Group Solvency II surplus5,6 estimated at £9.1 billion; equivalent to a ratio of 175 per cent

 

Mike Wells, Group Chief Executive, said: “The Group has delivered good progress on its key operating metrics – IFRS operating profit, underlying free surplus generation and new business profit– in a period of heightened macro-economic, geo-political and investment market uncertainty and volatility.

“The Group’s performance is led by double-digit growth in Asia, where IFRS operating profit grew 15 per cent to £743 million, operating free surplus generation grew 15 per cent to £419 million and new business profit grew 20 per cent to £824 million. In the US and the UK, we continue to successfully manage the effects of market turbulence. The quality of our earnings, geographic diversity and strong balance sheet position us well to grow over the long term. We remain on track to achieve our 2017 financial objectives.

“The attractiveness and value to consumers of de-risking their financial lives, whether it is through protecting health or wealth, are accentuated in periods such as the one we have experienced in the first half of this year. The secular, global trend of increasing self-reliance of the middle class to provide for savings and retirement, be it by a fast-growing, wealthier but younger population in our Asian markets or by a growing number of retirees in the US and the UK, remains intact despite the macro-economic uncertainty including the effect of historic low interest rates. Prudential is well placed to serve these needs through our leading positions in three of the most attractive insurance regions globally.

“The first-half performance demonstrates the quality of our franchises, the effectiveness of our strategy and our ability to leverage our broad capabilities to deliver on the significant growth opportunities in our chosen markets. We are well placed to capitalise on the positive structural trends and remain distinctive in our ability to deliver both growth and cash .”

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1 Period-on-period percentage increases are stated on a constant exchange rate basis unless otherwise stated. All amounts are comparable to the six months ended 30 June 2015 unless otherwise indicated.
2 Growth rate on an actual exchange rate basis.
3 Underlying free surplus generated comprises free surplus generated based on operating movements from long-term business (net of investment in new business) and that generated from asset management operations.
4 Comprises UK life, UK general insurance, M&G and Prudential Capital.
5 Before allowing for first interim dividend (31 December 2015: Second interim dividend).
6 The Group Solvency II surplus represents shareholder capital position excluding the contribution to Own Funds and the Solvency Capital Requirement from ring fenced With-Profit Funds and staff pension schemes in surplus.

 

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