AMP expects another tough year

AMPchief executive Paul Batchelor has remained optimistic about AMP’s profitability despite today announcing a decline in profits for 2001 and forecasting another tough year for the funds management giant.

Batchelor says while he was disappointed about the impact the global investment markets had on the company posting a profit 40 per cent down on the previous year ($690 million as at December 31, 2001 compared with 1.15 billion in 2000), the fact that shareholders will be receiving an increased full year dividend reflects growth in AMP’s underlying businesses.

AMP’s flagship global investment business,AMP Henderson Global Investors, was hardest hit by the global slump. The UK-based fund manager and Australasian financial services unit’s profits fell to $219 million from $233 million while its recurring operating margins fell to $208 million from $216 million.

Batchelor remained upbeat about Henderson’s future position and believed the group would cement itself “as a major externally focused international fund manager”.

AMP Financial Servicesalso suffered a shallow dive in profits, down 5 per cent in net profit to $600 million from $628 million while its operating margins rose to $393 million from $350 million.

But AMP’s UK Financial Services bucked the profit downturn trend by increasing its net profit from $468 million to $564 million and increasing its operating profits from $264 million to $328 million. AMP International and AMP’s administration business,Cogent, both made profits increases of $88 million and $6 million respectively.

Batchelor, however, predicted another tough year for the funds management conglomerate.

“We expect 2002 to be another tough year for global financial services and we are managing our businesses accordingly. Our primary focus in 2002 is to drive the short and medium term profitability of these businesses and deliver increased value for shareholders over the long term,” he says.