Insurance giant AIA reports worse-than-expected earnings for first half of the year
Net profit was down more than 50 per cent year on year to US$1.66 billion – a bigger drop than expected by Bloomberg analysts
AIA, the largest listed pan-Asia life insurer, reported worse-than-expected earnings for the first half of the year on Friday, as net profit dropped despite a growth in new business.
Net profit to the end of June was down more than 50 per cent year on year to US$1.66 billion, from US$3.24 billion in the same period in 2017. That was below Bloomberg analysts’ estimates of a 33 per cent fall to US$1.95 billion.
It may have been weighed down by equity market volatility and a high-base comparison a year earlier, said analyst Steven Lam, quoted by Bloomberg Intelligence.
Operating profit after tax, meanwhile, rose 14 per cent to US$2.65 billion, from US$2.23 billion a year earlier. At the same time AIA’s operating expenses grew 4 per cent to US$1 billion, from US$949 million in the same period last year.
The drop in net profit was mostly due to a significant decline in equity markets during the first half of the year, and partly as the figure stands in comparison to unusually high gains last year.
“We need to look at the long term. There will be volatility, but if you look at mainland business in Hong Kong it has been there for a long time, and it is growing,” said Ng Keng Hooi, AIA’s group chief executive and president. “Last year was an exceptional first half. We want to make sure the market doesn’t assume that is going to be the norm, so after normalisation we will see a more steady growth going into the future.”