AXA reports ‘steady as she goes’

AXA Asia Pacific reported an 18 per cent rise in operating earnings (excluding health) to $354.2 million this morning, yet this failed to translate into higher margins with net profit after tax and non recurring items for the 12 months ending December 2004 mirroring that of 2003.

Overall net profit for both 2003 and 2004 stood at $547 million, although the latter excluded earnings on AXA Health Insurance as it was sold in February 2003.

AXA Australia and New Zealand contributed positively to the group’s performance with the local wealth management and financial protection divisions growing their respective net profit levels by 33 per cent ($121.6 million) and 26 per cent ($70.7 million) respectively.

“Wealth management profits were helped by strong domestic equity performance, growth in funds under management, administration and advice, and further improvements in our cost income ratio,” group chief executive Les Owen said.

In terms of the net asset market value of AXA controlled entities, Ipac Securities saw the greatest growth in its market value after jumping from $206 million to $228 million over the 12 months.

The group also reported incurring $7 million of professional fees associated with its French-based parent’s proposed takeover bid towards the end of 2004.

Meanwhile AXA’s Hong Kong and Singapore operations experienced a marginal 5 per cent increase in operating earnings ($161.9 million), however a sharp 48 per cent drop in investment earnings down to $143.4 per cent resulted in an overall 30 per cent decline in net profit after tax and before non-recurring items to $303.9 million.

Owen remained buoyant on the firm’s presence in these markets, and pointed out that it had now achieved four out of six performance targets that were set back in 2001.

“Hong Kong remains a high growth market with only moderate insurance penetration and a high propensity to save. There is an emerging wealth management and advice market and we are well placed to leverage the group’s experience,” Owen said.

Elsewhere, 2004 also saw steady progress in China and South East Asia with total premium income rising 37 per cent to $455.4 million, and a 59 per cent rise in new business to $27.1 million.

“China and South East Asia represent our long term growth strategies. Success in these markets will, though, require a patient and long term strategic approach. We are continually looking at strategies to accelerate profitable growth in Asia and are actively looking at market entry opportunities in India,” Owen said.