Allianz Quarterly Profit Sharply Down--Update
05 August 2016 - 6:38PM
Dow Jones News
By Ulrike Dauer
FRANKFURT-- Allianz SE on Friday reported a 46% decline in
profit for the second quarter on a high disaster bill, a
substantial one-time hit from the planned sale of a unit and
continuing net asset outflows.
Still, Europe's biggest primary insurer by market value said
first-half results put the company on course for its full-year
operating profit targets.
Allianz, which owns U.S. bond fund manager Pacific Investment
Management Co., targets operating profit between EUR10.0 billion
($11.1 billion) and EUR11.0 billion for 2016.
"We stick to the midpoint of EUR10.5 billion as a good basis for
our guidance," said Chief Financial Officer Dieter Wemmer during a
media call.
Net profit fell to EUR1.09 billion from EUR2.02 billion in the
year-ago period. It was well shy of an average forecast of EUR1.51
billion in a Dow Jones poll.
Total revenue fell 2.5% to EUR29.4 billion.
Quarterly operating profit, the company's main yardstick, was
also lower at EUR2.35 billion. That marked a 17% decline from
EUR2.84 billion in the year-earlier quarter and was weaker than the
forecast of EUR2.39 billion.
Allianz's closely watched asset management business, Pimco,
contributed EUR498 million to operating profit in the second
quarter, beating analyst expectations of EUR488 million. That was
down 1.4% from EUR505 million in the same quarter of 2015.
Pimco still had quarterly net outflows of EUR18 billion, after
around EUR10.1 billion in the first quarter.
Nevertheless, Allianz reiterated it expects Pimco's net outflows
to stop in the second half.
Of the EUR18 billion net outflows, EUR17 billion was related to
a single large customer who withdrew funds in April, Mr. Wemmer
said. He declined to name the client and said net inflows and
outflows of other Pimco customers were stable.
Pimco has been a drag on group earnings ever since the asset
manager's turbulent management reshuffle two years ago that
culminated in the abrupt exit of co-founder and chief investment
officer Bill Gross in September 2014, six months after Chief
Executive Mohamed El-Erian had quit.
Investors have yet to see a clear turnaround at Pimco. Its net
asset outflows have gradually eased following an initial hiccup
that then spread over several quarters. In 2015, Pimco's flagship
Total Return Fund ceded its title as the world's largest bond
fund.
Last month, Pimco appointed a new chief executive. Emmanuel
Roman, currently chief executive of hedge-fund manager Man Group
PLC and a former Goldman Sachs Group Inc. banker, will take the
helm on Nov. 1. The present CEO, Douglas Hodge, an internal
appointment in the wake of Mr. El-Erian's departure, will assume a
role as managing director and senior adviser.
Allianz Chief Executive Oliver Baete, speaking in the same media
call, allayed fears that Allianz would in future take Pimco on a
shorter leash.
"We won't interfere in Pimco's daily business and fund
management," Mr. Baete said. "But we plan to better make use of
Pimco's know-how for the group's other products, customers and
business in different countries."
In the quarter, Allianz, like other insurers and reinsurers, had
to pay claims caused by floods in Europe, wildfires in Canada, and
hailstorms in the U.S., among others. Natural disasters cost
Allianz EUR501 million, up from EUR122 million. The total bill for
major disasters amounted to around EUR1.2 billion, about twice the
year-earlier number.
Allianz's quarterly earnings were also burdened by a EUR352
million one-time hit from selling its South Korea life insurance
and global investors business to China's Anbang Insurance
Group.
Allianz had said in May that the closing of the sale would curb
net profit by around EUR350 million. It sold the business for
around $3 million.
Last year, Allianz's second-quarter earnings had been spared
high claims payouts. They also got a EUR200 million one-time boost
after Allianz sold the retail business of its U.S. insurer
Fireman's Fund to ACE Ltd.
Write to Ulrike Dauer at ulrike.dauer@wsj.com
(END) Dow Jones Newswires
August 05, 2016 04:23 ET (08:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Allianz Ag Muenchen Namen (PK) (USOTC:ALIZF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Allianz Ag Muenchen Namen (PK) (USOTC:ALIZF)
Historical Stock Chart
From Jul 2023 to Jul 2024