Axa reports lower 2018 profit after IPO costs, natural disasters
(Reuters) — Net income at Axa SA, Europe’s second-biggest insurer, fell sharply as a result of charges related to its U.S. unit’s initial public offering and a spate of natural disasters, although Axa hoped for higher earnings this year.
Its 2018 profit fell 66% from a year earlier to €2.14 billion ($2.42 billion), below the €2.47 billion expected by analysts polled by Infront Data for Reuters.
The company had to book a €3 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 Group Ltd.
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 in 2018, of which €600 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% to 7% this year and next year.
Earnings rose 3% in 2018, while Axa also raised its dividend by 6% to €1.34 per share.
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