👀 Copy Legendary Investors' Portfolios in One ClickCopy For Free

Suncorp cash earnings jump on strong margins and investment returns, shares up

Published 02/07/2023, 04:53 PM
Updated 02/07/2023, 07:21 PM
© Reuters

By Roushni Nair

(Reuters) -Australia's Suncorp Group posted a 63% jump in first-half cash earnings on Wednesday, helped by strong underlying margins and investment returns, while the insurer flagged higher reinsurance and natural hazard costs as near-term risks.

Shares of the insurer, which rose more than 9% during the first half to Dec. 31, climbed as much as 4.7%, while the broader market was up 0.3%.

Suncorp logged strong top-line growth across verticals, with the release of a A$150 million ($104.43 million) provision for potential business interruption claims also boosting its performance.

First-half cash earnings rose to A$588 million from A$361 million a year ago, but missed UBS and Citi estimates of A$674 million and A$593 million, respectively.

"Most of the difference vs consensus seems to be due to items between the underlying and reported margin, suggesting the miss is unlikely to be too serious," analysts at Citi said.

"Overall, we see this as a solid result, with underlying trends largely in line with expectations... Suncorp seems to be a little cautious on outlook, but overall we expect the result to support the stock."

Separately, Suncorp flagged a modest rise in the number of natural hazard events in near term. "However, indications are that global reinsurance markets (will) remain in a hardening cycle, with higher return hurdles and capital constraints impacting the cost of reinsurance and risk retention," the company said.

The company said the sale of its banking arm to lender ANZ Group Holdings was on track and subject to regulatory approvals.

Suncorp declared an interim dividend of 33 Australian cents per share, up from 23 Australian cents per share a year earlier.

($1 = 1.4364 Australian dollars)

 

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.