Net profits at AXA, Europe’s second biggest insurer, fell sharply as a result of charges related to its U.S. unit’s initial public offering (IPO) and a spate of natural disasters, although AXA hoped for higher earnings this year.
Its 2018 net profit fell 66 percent from a year earlier to 2.14 billion euros ($2.42 billion), below the 2.47 billion [$2.8 billion] expected by analysts polled by Infront Data for Reuters.
The company had to book a 3 billion euro [$3.4 billion] write-down on the value of its U.S. Unit AXA Equitable which was listed in May 2018 at a price below its worth in AXA’s books.
The company also had to book costs related to the restructuring of its Swiss business and to the $15 billion acquisition of XL.
Under Chief Executive Thomas Buberl, AXA is undergoing a deep restructuring aimed at making the French group more international and stronger on health and property and damage insurance.
Natural disasters cost AXA about 2 billion euros [$2.3 billion] in 2018, of which 600 million euros [$680.7 million] corresponded to hurricane Michael in the U.S. and wildfires in California during the fourth quarter.
“In terms of natural catastrophes, this was a year like we see every 10 years,” Chief Financial Officer Gerald Harlin told reporters.
He maintained the company’s targets for underlying earnings per share to rise by 3-7 percent this year and next year.
Earnings rose 3 percent in 2018, while AXA also raised its dividend by 6 percent to 1.34 euros [$1.52] per share.
Earlier this month, Allianz – which is Europe’s biggest insurer – also posted higher earnings and added it might slow down its share buyback program.
($1 = 0.8827 euros) (Reporting by Inti Landauro; Editing by Sudip Kar-Gupta)
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