AMP result reflects market drag

AMP has felt the impacts of volatile markets and the cost drag of its merger with Axa Asia Pacific, reporting an 11 per cent decline in net profit after tax to $688 million for the 12 months to the end of December.

However the company said it preferred to rely on underlying profit, which had increased to $909 million from the $760 million for the previous financial year.

While the acquisition of AXA has certainly boosted AMP's capacity across a number of areas, the results announcement released to the Australian Securities Exchange (ASX) today revealed the degree to which volatile markets had still served to undermine its results.

AMP Financial Services net cash outflows were $581 million for the period, down from net cash inflows of $789 million for the corresponding prior period.

The company said AMP Financial Services operating earnings were $766 million, including nine months' contributions from the relevant AXA businesses.

There were some particular high spots within the AMP Financial Services business, including assets under management within AMP Flexible Super tripling over the year to $4.3 billion while attracting $3 billion in net cashflows, and AXA's North Platform increasing net cashflows by 72 per cent to $716 million.

The company noted that financial planner numbers in Australia and New Zealand had increased by 116 to 4,131, and that this had been achieved in an environment where planner numbers across the Australian financial adviser profession had declined.

Commenting on the results, AMP chief executive Craig Dunn said that while challenging market conditions had continued to impact the business, "the new AMP is well positioned to continue delivering on its growth strategy, while maintaining disciplined capital and cost management".

"AMP is a formidable competitor in our home markets of Australia and New Zealand," he said. "The increased scale of the merged businesses will also allow us to achieve new cost efficiencies."