(1 September 2008 – Australia) AMP has announced a drop in its interim profit, with a fall of 2 percent in underlying profit to $437 million for the six months to 30 June 2008.The $437 million profit result uses AMP’s chosen measure of profitability, underlying profit, as it removes investment market volatility and is the basis for determination of AMP’s dividends to shareholders. It also measures profit on a like-for-like basis.
Net profit attributable to shareholders, which represents AMP’s bottom line profit, fell by 22 percent to $366 million.
This profit takes into consideration a number of items including investment losses on shareholder funds of $49 million.
AMP chief executive officer, Craig Dunn said that with market conditions likely to remain volatile for the rest of this year, delivering growth in the short term will continue to be challenging.
However, AMP remains confident in the medium to long term outlook for the wealth management industry.
AMP Financial Services delivered a 3 per cent increase in operating earnings to $334 million in the first half,
Contemporary Wealth Management, which includes the financial planning, superannuation, pensions and banking businesses, operating earnings fell 2 percent to $142 million for the half, due largely to lower Assets Under Management (AUM)-related revenue.
In AMP Capital Investors, operating earnings were steady at $78 million despite market volatility. This was due in part to strong growth in performance and transaction fee income.
AUM fell 9 per cent to $101 billion for the half, primarily because of adverse investment market movements. Internally managed AUM fell 11 percent to $61 billion while externally managed AUM fell 5 per cent to $40 billion.
The interim dividend has been maintained at 22 cents per share, 85 per cent franked. An additional two cents per share payment from the proceeds of the sale of the Cobalt/Gordian business last year will also be paid, also 85 per cent franked.