Axa reports lower profit for 2018 after IPO costs and natural disasters
Net profits at AXA, Europe's second biggest insurer, fell sharply as a result of charges related to its US unit's initial public offering (IPO) and a spate of natural disasters, although AXA hoped for higher earnings this year.
Its 2018 Net profit fell 66pc from a year earlier to €2.14bn, below the €2.47bn expected by analysts polled by Infront Data for Reuters.
The company had to book a €3bn euro write-down on the value of its US 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 $15bn acquisition of XL.
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 €2bn in 2018, of which €600m corresponded to hurricane Michael in the US and wildfires in California during the fourth quarter.
"In terms of natural catastrophes, this was a year like we see every ten years," Chief Financial Officer Gerald Harlin told reporters.
He maintained the company's targets for underlying earnings per share to rise by 3-7pc this year and next year.
Earnings rose 3pc in 2018, while AXA also raised its dividend by 6pc to €1.34 per share.
Earlier this month, Allianz - which is Europe's biggest insurer - also posted higher earnings and added it might slow down its share buyback programme.