A disappointing first year as an Africa and Asia focused business sent Prudential shares lower on Wednesday as the company reported declines in IFRS profit after tax and new business profit for 2022.
Prudential shares were down over 6% in early trade on Wednesday. However, Prudential shares are significantly higher than their October lows after the a strong rally sparked by the China reopening.
The company pointed to resilience in the face of COVID-19 and the future opportunities in their geographies, but investors struggled to look past a slow 2022 caused by COVID-19 restrictions in Mainland China and Hong Kong.
Indeed, adjusted operating profit increased 8% on a constant currency basis (4% drop actual currency) with 9% higher APE sales. APE sales are a measure of new business not recognised by IFRS.
After demerging M&G in 2019, Prudential has shifted their strategy to focus Asian and African Insurance business an is heavily reliant on their Mainland China joint venture with CTIC for growth.
“2022 was the first full year for the Group as an Asia and Africa focused business. We have delivered a resilient performance against a backdrop of Covid-19-related disruption and broader macroeconomic volatility,” said Anil Wadhwani, Prudential CEO.
“The results reflect the advantage of our diversified business model across the Asia region, highlighted by a balanced contribution to APE sales and new business profit from Hong Kong, the Chinese Mainland and Taiwan and from South-east Asia, including Singapore, Indonesia and Malaysia.”
Prudential noted a sharp rebound in activity in the first two months of 2023 and are expecting Mainland China and Hong Kong to be a integral part of their growth in 2023.
Their growth markets segment that includes India, Thailand, Vietnam, the Philippines, Taiwan, Cambodia, Laos, Myanmar, and its businesses in Africa showed signs of promise as adjusted operating profit rose 13% to $1,057m.
Prudential increased their dividend 9% to total 18.78 cents per share for the full year, but still yields less than 2%.