Allianz Final Profit Falls 45%; Says Well Capitalized; Keeps Goal
May 12 2011 - 1:24AM
Dow Jones News
Allianz SE (ALV.XE), Europe's largest insurer by gross premiums
and market capitalization, Thursday reported a 45% decline in final
net profit for the first quarter, mainly reflecting high costs for
natural disaster claims, lower realized capital gains and a higher
tax rate.
A lower contribution from insurance operations, which was only
partially offset by improvements in asset management, also
contributed to the decline.
Nevertheless, Allianz said it is on track to reach its 2011
operating profit target in a range of EUR7.5 billion to EUR8.5
billion.
Net profit fell to EUR857 million from EUR1.57 billion, below a
Dow Jones Newswires consensus forecast of EUR1.09 billion.
Operating profit, which Allianz considers best reflects its
business performance, was down 4.2% to EUR1.66 billion, close to
the preliminary figure of nearly EUR1.7 billion and slightly above
the forecast EUR1.63 billion. That compares with last year's
EUR1.73 billion,
Allianz had already prepared investors for the outcome of
first-quarter results last week, when it released a small set of
key figures on the sidelines of its annual general meeting. Chief
Executive Michael Diekmann told the AGM the profit decline was
mainly due to the "intentional reduction" in realized gains on
investments in the quarter, a lower market value of financial
instruments and substantially higher tax expenditures, which will
ease in the course of the year.
Diekmann had also said Allianz expects to receive a bill of
around EUR750 million for claims caused by the earthquake and
tsunami in Japan, the earthquake in New Zealand and the flooding
and cyclone in Australia. Of this, around EUR320 million will be
related to the earthquake and tsunami that hit Japan in March.
The actual outcome was slightly lower. Allianz said Thursday
that expenses for natural disasters amounted to EUR737 million in
the first quarter, of which EUR697 million were allocated to the
events in Japan, Australia and New Zealand.
Allianz shares closed up EUR0.65, or 0.6%, at EUR101.65
Wednesday. The shares have gained 29% over the past year, raising
market capitalization to EUR46 billion.
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com