Prudential reports 8% surge in H1 operating profits

New business profits, however, went down by 5%.

Prudential reported an 8% surge in its half-year operating profits to $1.6b,  driven by increased sales activity in its life and asset management business combined with a 32% reduction in central costs, as interest costs fell following the group’s $2.25b debt redemption programme that was completed in January 2022.

The group’s new business profits, however, fell by 5% despite annual premium equivalent (APE) sales increasing by 6% to $2.2b. The impact of higher interest rates and differences in geographical and channel mix offset the benefit from higher APE sales.

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According to Prudential’s group chief executive, Mark FitzPatrick, the first half of the year saw considerable macroeconomic volatility, characterised in many markets by lower equity index levels, material increases in government bond yields and widening corporate bond spreads. 

“The combined impact of these factors on our balance sheet, with the fall in investments exceeding the reduction in liabilities, led to a significant fall in IFRS profit after tax for continuing operations from $1,070 million11 in the first half of 2021 to $106 million in the first half of 2022 and also led to a reduction in EEV under our active economic methodology,” FitzPatrick said.

Prudential reported that the group’s International Financial Reporting Standards (IFRS) shareholders' equity for H1 stood at $16.1b at $0.586 per share.