REPORTING SEASON: AMP Limited (AMP)
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Figure 1: AMP Limited 12 month chart
AMP Limited (AMP) strong HY profit helped by solid contribution from most businesses
• AMP has reported a statutory profit of $507 million in the 6 months to June 30. This is a rise of almost 33% compared to the $382 million profit posted in the previous corresponding period (pcp) and ahead of the $494 million figure which was the average of market estimates.
• Underlying profit removes the impact of one off items or in the case of AMP, takes into consideration factors such as market volatility or the cost of implementing significant regulatory changes. By this measure AMP reported underlying profit of $570 million, a 12% increase on the $510 million in the pcp.
• There were good performances across AMP’s various businesses with the exception of ‘Australian Mature’, AMP’s life insurance business, which reported a 9% fall in NPAT. The bulk of AMP’s earnings are derived from the Wealth Management business which saw after tax profit rise by 13% to $207 million. At the same time Assets Under Management (AUM) grew by 13% compared to 1H14 while costs declined by 2.3% from 1H14.
• The Investment Management business, AMP Capital, saw the best improvement with NPAT rising by more than 26% to $72 million, the result benefitting from a 16% increase in fee income. Profit at the Wealth Protection business rose by 9% to $99 million aided by an improvement in lapse rates (customers not renewing policies), while New Zealand Financial Services business reported an 11% increase in the same measure to $61 million. AMP Bank reported an impressive jump in after tax profit of 19% to $50 million, helped by lowering costs and an improvement in the net interest margin.
• AMP declared an interim dividend of 14cents per share. The record date is Thursday September 3, 2015, with a payment date Friday October 9, 2015.