Net profits at AXA, Europe’s second biggest insurer, fell sharply as a result of charges related to its U.S. unit’s initial public offering (IPO) and a spate of natural disasters, although AXA hoped for higher earnings this year.
Its 2018 Net profit fell 66 percent from a year earlier to 2.14 billion euros ($2.42 billion), below the 2.47 billion expected by analysts polled by Infront Data for Reuters.
The company had to book a 3 billion euro write-down on the value of its U.S. Unit AXA Equitable which was listed in May 2018 at a price below its worth in AXA’s books.
The company also had to book costs related to the restructuring of its Swiss business and to the $15 billion acquisition of XL.
Under Chief Executive Thomas Buberl, AXA is undergoing a deep restructuring aimed at making the French group more international and stronger on health and property and damage insurance.
Natural disasters cost AXA about 2 billion euros in 2018, of which 600 million euros corresponded to hurricane Michael in the U.S. and wildfires in California during the fourth quarter.
“In terms of natural catastrophes, this was a year like we see every ten years,” Chief Financial Officer Gerald Harlin told reporters.
He maintained the company’s targets for underlying earnings per share to rise by 3-7 percent this year and next year.
Earnings rose 3 percent in 2018, while AXA also raised its dividend by 6 percent to 1.34 euros per share.
Earlier this month, Allianz – which is Europe’s biggest insurer – also posted higher earnings and added it might slow down its share buyback program.
($1 = 0.8827 euros)