AMP reports disappointing first half
AMPFinancial Services has reported a steady but ‘soft’ performance for the first half of 2002, reflecting lower cash flow figures as a result of poor investment market conditions.
AMP’s overall results were down $100 million - a significant drop attributed to lower investment income, and the difference arising from non-recurring profit from last year’s sale of Virgin One and Resolve Engineering which raised first-half profits in 2001.
“Clearly, we want the business to do better but in the context of difficult markets, this is a solid result. Markets impact AMP in a variety of ways including investment income, fee levels on assets under management and customer propensity to invest,” AMP chief executive office Paul Batchelor says.
AMP Financial Services in Australia and New Zealand recorded a flat result when compared against last year’s first half figures, with core recurring operating margins down one million to $197 million. The division managed to raise net profits in New Zealand by 18 per cent to NZ$26.4 million, but the division as a whole saw net after tax profits from ordinary activities down close to 50 per cent to $140 million from $300 million in the previous year.
For AMP as a whole, investment management fees were down to $383 million from $410 million in the first-half of 2001. And assets under management fell to $265 billion down from $292 billion for the six months preceding December 31, 2001.
AMP’s financial services operations in the UK enjoyed growth of seven per cent in core recurring operating margins - a pleasing result given current depressed UK investment markets. But subsidiary group Henderson Global Investors had a lacklustre first-half, and was “heavily impacted by investment market downturns through reduced fees on lower asset values and a reduction in investor appetite for investments,” according to AMP.
The group expects profits to hold at similar levels for the remainder of the year, but is more upbeat about its outlook for 2003.
“While there are risks to the economic recovery which we are seeing around the world, on balance, we believe the global economy will be stronger in 2003. We are positive on the medium term outlook for equity markets and we are positive about AMP’s outlook for 2003,” Batchelor says.
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