Cashflow down, but AMP 'still on track'


AMP chief Paul Batchelor says the group is on track for double-digit growth in 2001

By CNN's Geoff Hiscock
Asia business editor

SYDNEY, Australia (CNN) -- Australia's largest life insurer and funds manager AMP Ltd expects double-digit growth in its core operating margins in 2001, despite a sharp dropoff in net cashflow in the September quarter.

Net cashflow was $1.61 billion (Aust$3.16 billion), against $4 billion (A$7.81 billion) in the comparable quarter last year.

AMP attributed that 60 percent downturn to "turbulent market conditions worldwide," with investors in the U.K. and Europe fleeing volatility.

AMP operates in 16 markets, with most of its activity in Australia, New Zealand and the U.K.

About a quarter of its assets under management are in Australia and New Zealand, with about 73 percent in the U.K./Europe. North America accounts for 2 percent.

AMP chief executive officer Paul Batchelor said Monday that while global uncertainty and the market turbulence had an impact on the group's third-quarter gross inflows of $7.2 billion (Aust. $14.1 billion), they still were up 13 percent on the year before.

Higher outflows 'not surprising'

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He called this a "pleasing result in the current climate".

But outflows, particularly in the U.K. and Europe, were much higher than 2000. Batchelor said this was not surprising, given the volatility in those markets.

After outflows of $5.58 billion (A$10.945 billion) compared with $2.4 billion (A$4.7 billion) in 2000, net cashflow was $1.61 billion (A$3.16 billion).

Net cashflow is the difference between sales and payouts on insurance and wealth management products.

"At current market levels, AMP still expects to deliver double-digit growth in core recurring operating margins for the full 2001 year," Batchelor said in a statement to the Australian Stock Exchange Monday.

Investment earnings depend on December markets

He said that under the "mark to market" requirement, AMP's investment earnings for 2001 would depend largely on the state of the markets at December 31.

AMP manages assets of about $148 billion and has a market capitalization of just over $10.3 billion, which ranks it among the top 10 Australian listed companies. It made a profit of about $590 million last year

Its shares closed Monday at A$17.50, down 19 cents or about 1.1 percent on Friday's close. Its high for the year is A$22.00, reached in June.