Axa Asia Pacific profit surges
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SYDNEY, Australia (CNN) -- Insurance giant Axa Asia Pacific has almost doubled full-year profit in 2003 to Aust. $537 million ($416 million) on strong performances in Australia, New Zealand and Hong Kong.
Its profit figure compares with A$273 million in the 2002 calendar year and is well ahead of analysts' expectations of $400 to $500 million.
Axa CEO Les Owen said Tuesday that cost cuts and other major changes made by the group in the past three and a half years were now paying off.
Axa Asia Pacific, which is controlled by French parent Axa S.A., sold its health business in February 2003 for A$366 million to concentrate on funds management and life insurance. It has also signalled China as a growing market of opportunity.
Shares in Axa are 2.2 percent higher to A$2.77 in Tuesday morning trade, after the announcement to the Australian Stock Exchange.
Axa's operating earnings in Australia and New Zealand rose 17 percent to A$147 million. In Hong Kong, operating earnings were up 21 percent to HK$800 million.
Owen said investment earnings surged 189 percent to $322 million, due mainly to improved equity markets. That was partly offset by the appreciation of the Australian dollar, which has risen 34 percent against the U.S. dollar.
"The last 12 months have seen a return to growth for Axa in Hong Kong and strong growth in China, and I expect this to continue," Owen said, noting that life insurance penetration in Hong Kong was still relatively low compared to other developed countries.
He said Axa saw a major opportunity in China through the Closer Economic Partnership Agreement (CEPA) with Hong Kong.
"We are well placed in the growing retirement and long term savings markets."
Owen said Axa's priorities in China were to speed up growth in Shanghai and Guangzhou via its Axa Minmetals joint venture, and to prepare for new markets opening up in other cities under China's accession to the World Trade Organization.
