TEL-AVIV, Israel, Aug. 22,
2024 /PRNewswire/ -- Phoenix Financial Ltd. (formerly
Phoenix Holdings), a leading Israel-based financial, insurance, and
investment group (TLV:PHOE) ("Phoenix," the "Group," or the
"Company"), today reported its results for the first half of 2024
and second quarter of 2024.
Income and return on equity
Phoenix reports NIS 667 million in
comprehensive income for the first half of 2024, resulting in
NIS 2.65 in income per share and 12.8% in return on equity.
Core comprehensive income totaled NIS 869 million (net of
non-operating effects, including capital market effects above and
below real returns of 3%, interest rate effects and special items),
which reflects a core (normalized) return on equity of 16.7%.
In the second quarter of 2024, Phoenix reports NIS 383 million in comprehensive income,
reflecting NIS 1.52 in income per share and 15.1% return on
equity. Core comprehensive income (net of non-operating effects,
including capital market effects above and under real returns of
3%, interest rate effects and special items) totaled NIS
548 million, which reflects core (normalized) return on equity
of 21.9%.
Growth in profitability and activities
Phoenix reports continued growth in its Asset Management,
Distribution, and Credit activities with NIS
275 million and NIS 146 million in core
comprehensive income for the first half of 2024 and second quarter
of 2024, respectively, compared to NIS 215
million and NIS 114 million in the first half and
second quarter of 2023, respectively.
Adjusted EBITDA for the Asset Management, Distribution, and
Credit activity totaled NIS 567 million and
NIS 286 million in the first half and the second quarter
of 2024, respectively, consolidated including minorities, compared
to NIS 459 million and
NIS 232 million in the first half of 2023 and the second
quarter of 2023, respectively.
The Group reports continued, consistent growth in Insurance
activities, with core comprehensive income increasing to
NIS 594 million and NIS 402 million in the first half and the second
quarter of 2024, respectively, compared to NIS 435 million and NIS
243 in the first half and the second quarter of 2023,
respectively.
Total assets under management increased 11% in the first half of
2024 to NIS 480 billion, including
the acquisition of Psagot's fund management activities completed in
March 2024; the Group's Credit
portfolio was NIS 5.8 billion.
Phoenix has achieved its strategic goals for 2025 earlier than
expected and expects to publish updated strategic targets and
roadmap on September 9, 2024.
Financial resilience
Phoenix has a strong financial profile characterized by high
liquidity and low net debt, further supporting the company's
dividend policy. Asset Management, Distribution, and Credit
activities generate significant and increasing cash flow; in
addition, in June Phoenix-Gama
successfully completed an issuance of commercial notes totaling
0.5 billion shekels. Phoenix
Insurance has a high solvency ratio of 191% the transitional
measures as of March 31, 2024 (after dividend
distribution).
On August 19, 2024, rating agency
Midroog raised its Phoenix Insurance credit rating to Aaa.il, the
highest on the Israeli rating scale. Phoenix also has an existing
ilAAA rating from Maalot and international insurance ratings
including A2 by Moody's and A- by S&P. These strong financial
ratings reinforce Phoenix's leadership position in the insurance
and finance sector in Israel.
Dividend and buyback
Phoenix's dividend policy increased this year from at least 30%
to at least 40% of annual comprehensive income, reflecting
successful strategic execution and associated growth in the Group's
profitability and cash flows.
Today, Phoenix announced a dividend distribution of NIS 270 million from first half income, which
reflects NIS 1.07 per share. Since
2020, Phoenix has distributed dividends of approximately
NIS 2 billion.
In addition, by the report publication date, the company has
executed NIS 116 million out of the
NIS 200 million 2024 buyback plan.
The dividend and buybacks together represent 58% of the
company's income for the period.
Eyal Ben Simon,
Phoenix CEO:
"Israel is still at war on
several fronts and, as a leading financial group, Phoenix continues
to support and assist Israeli society with resources and volunteer
efforts while also focusing on its business activities. Our hearts
go out to the families of the fallen, and we pray for the quick
return of the hostages and for the recovery of the wounded.
For the second quarter of 2024, Phoenix reports continued growth
in both our Insurance business and our Asset Management,
Distribution, and Credit businesses, despite non-operating factors
including capital market uncertainty. The Group's successful
execution of its business strategy, including offering compelling
client and agent value propositions and leveraging associated
technologies, further highlights our competitive advantages,
leadership, and financial position.
After the end of the quarter, several leading international
funds acquired Phoenix shares from Centerbridge and Gallatin,
representing a significant vote of confidence in the Group and the
Israeli economy. Going forward, Phoenix's committed and experienced
management team continues to focus on driving strategic growth and
value creation.
The Group continues to grow its return on equity and dividend
distributions, reflecting strong performance and continued
improvement in profitability across activities. Core comprehensive
income is meeting 2025 targets ahead of schedule, based on solid
foundations, leading market positions, and careful management of
opportunities and risks. In September, we will present updated
strategic targets, reflecting the Group's opportunities for
significant growth and value creation in the coming years."
Highlights
Comprehensive income attributable to shareholders:
For the first half of 2024, the comprehensive income
attributable to shareholders amounted to NIS
667 million, reflecting a return on equity of 12.8%,
compared to a return on equity of 6.0% in the first half of 2023.
The comprehensive income in the first half of 2024 was
achieved despite the economic challenges and non-operating negative
effects (capital markets above or below 3% real returns, interest
rate effects, and special items) of NIS 202
million.
Core income (net of non-operating effects, including the
capital market above and under a real return of 3%, interest rate
effect and special items)
Core income increased to NIS 869
million in the first half of 2024, reflecting a 16.7% core
return on equity, compared to NIS 650
million, reflecting a 13.0% core return on equity in the
corresponding half last year.
Core income from Insurance increased to
NIS 594 million compared to NIS 435 million in
the corresponding period last year, and core income from Asset
Management, Distribution and Credit increased to
NIS 275 million compared to NIS 215 million in
the corresponding period last year.
Shareholders' equity
Equity attributable to Company's shareholders totaled
NIS 10.8 billion as of June 30, 2024.
Assets under management
Total assets under management increased to
NIS 480 billion as of June 30, 2024, including
the March 2024 acquisition of fund
management activity from Psagot.
The Group is meeting strategic targets for 2025 and will publish
revised strategic growth targets and roadmap on September 9, 2024.
Operating segment results
Insurance
P&C
Comprehensive income before tax for the first half of 2024
amounted to NIS 507 million, compared to a
comprehensive income of NIS 173
million before tax for the corresponding period last year.
The increase reflects improvement in underwriting income from Motor
Property, Other Property, and Other Liability subsegments, offset
by a decrease in profitability in the Compulsory Motor subsegment
and interest rate effects.
Health
Comprehensive income before tax for the first half of 2024
amounted to NIS 259 million, compared to
NIS 73 million before tax in the
corresponding period last year. This growth reflects an increase in
the underwriting income, primarily due to an improvement in the
loss ratio, and policyholder mix, primarily due to an improvement
in the individual health portfolio and interest rate effects.
Life and Savings
Comprehensive loss before tax for first half of 2024 amounted to
NIS 42 million, compared to a comprehensive loss
of NIS 83 million before tax in the
corresponding period last year. The reduction in loss resulted
primarily from an increase in underwriting income. The positive
effect of the change in the interest rate curve, including the
change in the K factor, was offset by capital market effects and
updated mortality tables.
It is noted that as of shortly before the report publication
date, shortfall in variable management fees amounted to
NIS 228 million.
Other Equity Returns
Comprehensive loss before tax for the first of 2024 amounted to
NIS 121 million, compared to a comprehensive loss of
NIS 181 million before tax in the
corresponding period last year. The decreased loss is primarily due
to capital market conditions compared with the corresponding period
last year.
Asset Management, Agencies, and Credit
Retirement (Pension and Provident)
Comprehensive income before tax for the first half of 2024
amounted to NIS 47 million, compared to NIS 60 million before tax in the corresponding
period last year.
Investment House and Wealth
Comprehensive income before tax for the first half of 2024
amounted to NIS 151 million, compared to NIS 111 million last year. The year-over-year
increase in profitability is due to an improvement in the income in
the Funds & Portfolios subsegment following acquisitions.
Distribution (Agencies)
Comprehensive income before tax for the first half of 2024
amounted to NIS 155 million, compared to a comprehensive
income of NIS 155 million before tax
in the corresponding period last year.
Credit (Phoenix Gama)
Comprehensive income before tax for the first half of 2024
amounted to NIS 71 million, compared to comprehensive income
of NIS 55 million before tax in the
corresponding period last year. The increase in profitability stems
mainly from an increase in activity turnovers and credit
spreads.
Conference Call Information
Phoenix Holdings
will hold a conference call on Thursday,
August 22 at 1pm local time in
Hebrew and at 5pm local time /
3pm UK / 10am
ET in English, and has published dial-in details and the
presentation through the Tel Aviv Stock Exchange
website.
About Phoenix Financial (formerly Phoenix
Holdings)
Phoenix Financial is a leading Israel-based financial and investment group
traded on the Tel Aviv Stock Exchange (TASE:
PHOE). Group activities include multi-line insurance, asset
management, credit, and brokerage services, and have demonstrated
strong growth and performance across the cycle. Phoenix serves a
significant portion of Israeli households with a broad set of
activities and solutions across businesses and client segments.
Managing over $120 billion in assets,
Phoenix accesses Israel's vibrant
and innovative economic activity through a robust investment
portfolio, creating value for clients and shareholders.
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SOURCE Phoenix Financial Ltd.