NZ earnings down at takeover target Axa

Financial services firm and takeover target Axa Asia Pacific Holdings' New Zealand 2009 full-year operating earnings were down by 18 per cent to $35.1 million as funds under management fell, the company said yesterday.

Axa's average funds under management for the year fell 17 per cent to $6.25 billion although they ended the year at $6.42 billion, 2 per cent above where they began the year.

Operating earnings in the previous corresponding period were boosted by a $3.8 million gain on unrealised assets.

Funds under management for the entire Australia-based group also eased but it nevertheless held overall operating earnings steady at A$554 million on improved performance and increased funds under management and operating earnings at its Hong Kong and Southeast Asian divisions.

The company prefers operating earnings as a measure of performance as it removes unrealised asset fluctuations. However the bottom line improved vastly from last year's A$278.7 million loss to a A$679.2 million ($867.6 million) profit.

"Notwithstanding the possible acquisition of Axa APH, management is firmly focused on continuing to drive the business forward and concentrating on maximising shareholder value," chief executive Andrew Penn said. "We have navigated our way through the global financial crisis successfully and 2010 is about accelerating our growth."

Axa APH agreed to a A$13.3 billion takeover offer from National Australia Bank in December, which trumped an earlier joint offer from AMP and Axa APH's majority owner Axa SA of France.

Like the AMP offer, NAB's bid relies on Axa SA agreeing to purchase Axa APH's faster growing Asian business.

Axa APH declared a final dividend of 9.26c per share, taking the full year distribution to 18.5c, unchanged from the year before.

The company reported investment earnings of A$185.1 million, compared with investment losses of A$537.7 million during 2008.

Penn said the company had a strong balance sheet, with A$1.61 billion of assets in excess of regulatory requirements and a gearing ratio of 27 per cent. He said the Hong Kong business was focused on expanding its distributions channels.

The Australia and New Zealand business was planning to expand in the retirement market and in the self-funded superannuation fund market.

Axa APH's funds under management declined 3 per cent to A$80.95 billion. Normalised earnings per share fell 14 per cent to 30.2cps.