Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Generali Shares dip Despite H1 Earnings Beat

Published 02/08/2022, 08:48 pm
Updated 02/08/2022, 08:48 pm
© Reuters.

© Reuters.

By Scott Kanowsky

Investing.com -- Assicurazioni Generali SpA (BIT:GASI) shares were lower in mid-morning European trading despite the Italian insurance firm posting better-than-expected first-half earnings.

The company reported a 9% decline in total net profit to €1.4 billion during the period, dragged lower by a €138 million impairment charge from investments in its Russian operations, which Generali pledged to exit in March in the wake of Moscow's invasion of Ukraine.

However, the figure was still above analyst estimates of 1.33 billion euros.

Highlighting the results was a strong performance in Generali's life insurance segment, which saw its operating income jump by 17.1% to €1.69 billion thanks in part to an uptick in the value of new business.

Generali confirmed its plan to achieve a compound annual growth rate in earnings per share of between 6% - 8% in 2021 - 2024. It also pledged to distribute a cumulative dividend to shareholders of between €5.2 billion and €5.6 billion over the next two and a half years.

But the firm warned that its outlook could be hit by increasing geopolitical tensions and worries over a broad economic slowdown.

"[T]he global insurance sector may be affected by uncertainty due to an economic slowdown, that may become recession, an increase in inflation and the risks of escalation following the Russian invasion of Ukraine, as well as to the spread of new variants of coronavirus," Generali said.

The company said it would move to mitigate these risks, including a planned price increase at its non-life unit to combat costs related to soaring inflation.

Chief executive officer Philippe Donnet - who recently survived a challenge to his leadership from two of Generali's largest investors - also flagged the uncertainties facing the company, but said it will stick to its long-term strategy.

"In the months to come, we will continue to be fully committed to the execution of our three-year plan as we reinforce our Group's leadership as a global insurer and asset manager,” Donnet said in a statement.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.