Prudential plc Half Year 2009

LONDON--(Marketwire - August 13, 2009) - PRUDENTIAL PLC HALF YEAR 2009 RESULTS PRUDENTIAL DELIVERS STRONG PERFORMANCE IN CHALLENGING CONDITIONS Capital & Dividend: - Improved and very strong Insurance Groups Directive ("IGD") capital surplus estimated at GBP3.0 billion at 31 July 2009 and GBP 2.5 billion at 30 June 2009 (before any allowance for 2009 interim dividend) - 2009 half year dividend increased by 5% to 6.29 pence per share IFRS: - IFRS operating profit of GBP688 million up 6% * Embedded Value: - New Business Profit of GBP691 million up 25% * - EEV Operating Profit of GBP1,246 million down 8% * New Business: - Group EEV new business profit margin of 52% on an APE basis (2008: 38%) * - Group new business APE premiums of GBP1,321 million down 8% * Mark Tucker, Group Chief Executive said: "These results demonstrate a continuing strong performance by the Prudential Group in what remain challenging market conditions. As a result of the decision we took last year to focus on capital conservation and cash generation by concentrating on expanding sales in our most profitable product lines, we have been able to manage our investment in new business and improve our margins across the Group in the first six months of the year. Compared with the same period in 2008 our Group EEV New Business Profit increased 25 per cent to GBP691 million, and our Group IFRS statutory operating profit increased six per cent to GBP688 million. Our Group EEV Operating Profit decreased eight per cent to GBP1,246 million. While our life businesses held their contribution at 2008 levels, market conditions held back the contribution from our asset management businesses and reduced income at Group level. Group new business APE premiums were GBP1,321 million, down eight per cent. In Asia, New Business Profit was GBP277 million, down 4.2 per cent but this compares with a very strong first half in 2008. It is particularly encouraging that demand for higher margin protection products remains resilient in Asia, and we believe that our relative position in the region is continuing to strengthen. Jackson, our US business, delivered total APE sales of GBP392 million in the first half of 2009, up 10 per cent on the first half of 2008. The company's retail sales were the highest in any first half in its history, as we continued to benefit from a flight to quality. Jackson's New Business Profit was GBP292 million, up 113 per cent. Prudential UK had a strong first half relative to the market, with total APE sales of GBP376 million, down 14 per cent, and retail sales of GBP374 million, down eight per cent. These lower sales resulted in a reduction in EEV New Business Profit of five per cent to GBP122 million, with the underlying new business margin increasing to 32 per cent, demonstrating the success of our strategy of focusing on value over volume. Despite the challenging market environment, our asset management businesses have continued to deliver record net inflows, capitalising on their leading market positions and history of strong investment performance. M&G continued to benefit from a combination of superior investment performance, diversified business mix and well-established distribution capabilities. These attributes helped M&G achieve an exceptionally strong first half, with net fund inflows of GBP8.6 billion up 254 per cent. Our prudent but proactive approach enabled us to strengthen further our Group capital position and, at 30 June 2009, we had an estimated IGD surplus of GBP2.5 billion before any allowance for the interim dividend, up from GBP1.5 billion at the end of 2008. In addition, we completed a bond issue during July which will increase our IGD capital surplus by a further GBP0.5 billion to an estimated GBP3.0 billion. In line with our sustainable dividend policy, we are pleased to announce an increase in the interim dividend of five per cent to 6.29 pence per share. While we expect the business environment to remain difficult through the rest of 2009, Prudential is very well positioned to take advantage of any improvement in market conditions. Our Group-wide focus on long-term profitable growth remains unchanged and our combination of geographic diversification, advantaged distribution and flexible and full product range all mean we can focus on the most profitable opportunities, especially in the pre and post-retirement sector. Combined with our dynamic approach to risk management, this means we are well placed to continue to outperform over the economic and financial cycle. I am immensely proud to have served as Chief Executive of Prudential. I leave knowing that we have an excellent management team in place across the Group and I am confident that Tidjane will continue to lead the Group from strength to strength." ENDS *2008 comparatives are at actual exchange rates (AER). In order to facilitate comparisons for the Group's current business amounts shown for 2009 and 2008, new business and profit related KPIs exclude those of the Taiwan agency business for which the sale process was completed in June 2009. Enquiries: Media Edward Brewster +44 (0)20 7548 3719 Sunita Patel +44 (0)20 7548 2466 Tom Burns, Brunswick +44 (0)20 7404 5959 Investors/Analysts Matt Lilley +44 (0)20 7548 2007 James Matthews +44 (0)20 7548 3561 Jessica Stalley +44 (0)20 7548 3511 Notes to Editors: 1 In addition to the financial statements provided with this press release, additional financial schedules, including full details of the Group's investments, are available on the Group's website at www.prudential.co.uk/prudential-plc/ 2 The results in this announcement are prepared on two bases: International Financial Reporting Standards ('IFRS') and European Embedded Value ('EEV'). The IFRS basis results form the basis of the Group's statutory financial statements. The supplementary EEV basis results have been prepared in accordance with the principles issued by the CFO Forum of European Insurance Companies in May 2004. Where appropriate the EEV basis results include the effects of IFRS. Period on period percentage increases are stated on an actual exchange rate basis. 3 Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. 4 Present value of new business premiums (PVNBP) are calculated as equalling single premiums plus the present value of expected new business premiums of regular premium business, allowing for lapses and other assumptions made in determining the EEV new business contribution. 5 Operating profits are determined on the basis of including longer-term investment returns. EEV and IFRS operating profit is stated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions, the shareholders' share of actuarial and other gains and losses on defined benefit pension schemes, and the effect of disposal and results of the Taiwan agency business, for which the sale process was completed in June 2009. In addition for EEV basis results, operating profit excludes the effect of changes in economic assumptions and the time value of cost of options and guarantees, and the market value movement on core borrowings. 6 There will be a conference call today for wire services at 07.30am (BST) hosted by Mark Tucker, Group Chief Executive and Tidjane Thiam, Chief Financial Officer and Group Chief Executive-designate. Dial in telephone number: 020 8609 0793. Passcode: 797476# 7 A presentation to analysts will take place at 09.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. An audio cast of the presentation and the presentation slides will be available on the Group's website, www.prudential.co.uk/prudential-plc/ 8 High resolution photographs are available to the media free of charge at www.newscast.co.uk on +44 (0) 207 608 1000 or by calling Sunita Patel on 020 7548 2466. 9 Total number of Prudential plc shares in issue as at 30 June 2009 was 2,523,718,245. 10 Financial Calendar 2009: Third Quarter 2009 Interim Management Statement 28 October 2009 2009 Interim Dividend Ex-dividend date 19 August 2009 Record date 21 August 2009 Payment of dividend 24 September 2009 11 About Prudential plc Prudential plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute one of the world's leading financial services groups. It provides insurance and financial services through its subsidiaries and affiliates throughout the world. It has been in existence for over 160 years and has GBP245 billion in assets under management (as at 30 June 2009). Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America. Forward-Looking Statements This statement may contain certain "forward-looking statements" with respect to certain of Prudential's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similar meaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Prudential's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate. This may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. As a result, Prudential's actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in Prudential's forward-looking statements. Prudential undertakes no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements it may make. To view the full text of this press release, paste the following links into your web browser: http://www.rns-pdf.londonstockexchange.com/rns/3636X_1-2009-8-12.pdf http://www.rns-pdf.londonstockexchange.com/rns/3636X_3-2009-8-12.pdf12.pdf http://www.rns-pdf.londonstockexchange.com/rns/3636X_2-2009-8-12.pdf This information is provided by RNS The company news service from the London Stock Exchange END