- First Half New Business Profit of $ 1.18 Billion vs. Forecast of $ 1.08 Billion
- Shares rise 2.5%
- The company does not plan to abandon its London base – CEO
LONDON, Aug. 11 (Reuters) – The coronavirus pandemic makes the short-term outlook uncertain for Prudential (PRU.L), the Asia-focused insurer said on Wednesday, as it reported an increase in 25% of profits from new business in the first half of the year.
COVID-19 cases are increasing and restrictions are increasing in many Asian countries due to the more transmissible Delta variant.
“The operating environment remains tough, we have to run a business of a very nimble model,” CEO Mike Wells said on a media call, highlighting increased use of online sales.
In the longer term, the pandemic was likely to increase demand for life and health insurance, Wells added.
Prudential will be based only in Asia and Africa after finalizing the split of its US company Jackson, scheduled for September 13. It sold its UK and European business, M&G (MNG.L), in 2019.
Jackson’s split follows pressure from activist investor Third Point, which took a stake in Prudential last year.
Third Point also criticized the London headquarters of Prudential.
Prudential, which is now regulated in Hong Kong, is headquartered in both cities but has no plans to abandon its London base, Wells said.
The insurer posted a 25% increase in its half-year profit on new business to $ 1.18 billion, above the $ 1.08 billion seen in an analyst forecast consensus provided by the company.
Prudential reiterated that it plans to raise around $ 2.5 billion to $ 3.0 billion in equity through a global offering to Hong Kong institutions and retail investors, following the Jackson split.
Prudential shares were trading up 2.51% at 14.88 pounds at 09:41 GMT, among the top performers on the FTSE 100 (.FTSE). Barclays analysts called the results “resilient”, reiterating their rating of “overweight” on the stock.
Prudential said it will pay an interim first dividend of 5.37 cents per share, unchanged from a year ago.
Reporting by Carolyn Cohn Editing by Kirstin Ridley and Mark Potter
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