Prudential plc Half Year 2009

LONDON--(Marketwire - August 13, 2009) - PRUDENTIAL PLC HALF YEAR 2009 RESULTSPRUDENTIAL DELIVERS STRONG PERFORMANCE IN CHALLENGING CONDITIONSCapital & Dividend: - Improved and very strong Insurance Groups Directive ("IGD") capital surplus estimated at GBP3.0 billion at 31 July 2009 and GBP 2.5 billion at 30 June 2009 (before any allowance for 2009 interim dividend) - 2009 half year dividend increased by 5% to 6.29 pence per shareIFRS: - IFRS operating profit of GBP688 million up 6% *Embedded Value: - New Business Profit of GBP691 million up 25% * - EEV Operating Profit of GBP1,246 million down 8% *New Business: - Group EEV new business profit margin of 52% on an APE basis (2008: 38%) * - Group new business APE premiums of GBP1,321 million down 8% *Mark Tucker, Group Chief Executive said:"These results demonstrate a continuing strongperformance by the Prudential Group in what remainchallenging market conditions. As a result of thedecision we took last year to focus on capitalconservation and cash generation by concentrating onexpanding sales in our most profitable product lines,we have been able to manage our investment in newbusiness and improve our margins across the Groupin the first six months of the year. Compared with thesame period in 2008 our Group EEV New Business Profitincreased 25 per cent to GBP691 million, and our GroupIFRS statutory operating profit increased six per centto GBP688 million.Our Group EEV Operating Profit decreased eight per centto GBP1,246 million. While our life businesses heldtheir contribution at 2008 levels, market conditions heldback the contribution from our asset management businessesand reduced income at Group level. Group new business APEpremiums were GBP1,321 million, down eight per cent.In Asia, New Business Profit was GBP277 million, down4.2 per cent but this compares with a very strong firsthalf in 2008. It is particularly encouraging that demandfor higher margin protection products remains resilientin Asia, and we believe that our relative position in theregion is continuing to strengthen.Jackson, our US business, delivered total APE sales ofGBP392 million in the first half of 2009, up 10 per centon the first half of 2008. The company's retail sales werethe highest in any first half in its history, as wecontinued to benefit from a flight to quality. Jackson'sNew Business Profit was GBP292 million, up 113 per cent.Prudential UK had a strong first half relative to themarket, with total APE sales of GBP376 million, down14 per cent, and retail sales of GBP374 million, downeight per cent. These lower sales resulted in a reductionin EEV New Business Profit of five per cent to GBP122million, with the underlying new business marginincreasing to 32 per cent, demonstrating the success ofour strategy of focusing on value over volume.Despite the challenging market environment, our assetmanagement businesses have continued to deliver record netinflows, capitalising on their leading market positionsand history of strong investment performance. M&Gcontinued to benefit from a combination of superiorinvestment performance, diversified business mix andwell-established distribution capabilities. Theseattributes helped M&G achieve an exceptionally strongfirst half, with net fund inflows of GBP8.6 billionup 254 per cent.Our prudent but proactive approach enabled us tostrengthen further our Group capital position and, at30 June 2009, we had an estimated IGD surplus of GBP2.5billion before any allowance for the interim dividend,up from GBP1.5 billion at the end of 2008. In addition,we completed a bond issue during July which will increaseour IGD capital surplus by a further GBP0.5 billion to anestimated GBP3.0 billion.In line with our sustainable dividend policy, we arepleased to announce an increase in the interim dividendof five per cent to 6.29 pence per share.While we expect the business environment to remaindifficult through the rest of 2009, Prudential is verywell positioned to take advantage of any improvement inmarket conditions. Our Group-wide focus on long-termprofitable growth remains unchanged and our combination ofgeographic diversification, advantaged distribution andflexible and full product range all mean we can focus onthe most profitable opportunities, especially in the preand post-retirement sector. Combined with our dynamicapproach to risk management, this means we are wellplaced to continue to outperform over the economic andfinancial cycle.I am immensely proud to have served as Chief Executive ofPrudential. I leave knowing that we have an excellentmanagement team in place across the Group and I amconfident that Tidjane will continue to lead theGroup from strength to strength."ENDS*2008 comparatives are at actual exchange rates (AER). Inorder to facilitate comparisons for the Group's currentbusiness amounts shown for 2009 and 2008, new business andprofit related KPIs exclude those of the Taiwan agencybusiness for which the sale process was completedin June 2009.Enquiries:MediaEdward Brewster +44 (0)20 7548 3719Sunita Patel +44 (0)20 7548 2466Tom Burns, Brunswick +44 (0)20 7404 5959Investors/AnalystsMatt Lilley +44 (0)20 7548 2007James Matthews +44 (0)20 7548 3561Jessica Stalley +44 (0)20 7548 3511Notes to Editors:1 In addition to the financial statements provided with this press release, additional financial schedules, including full details of the Group's investments, are available on the Group's website at www.prudential.co.uk/prudential-plc/2 The results in this announcement are prepared on two bases: International Financial Reporting Standards ('IFRS') and European Embedded Value ('EEV'). The IFRS basis results form the basis of the Group's statutory financial statements. The supplementary EEV basis results have been prepared in accordance with the principles issued by the CFO Forum of European Insurance Companies in May 2004. Where appropriate the EEV basis results include the effects of IFRS. Period on period percentage increases are stated on an actual exchange rate basis.3 Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales.4 Present value of new business premiums (PVNBP) are calculated as equalling single premiums plus the present value of expected new business premiums of regular premium business, allowing for lapses and other assumptions made in determining the EEV new business contribution.5 Operating profits are determined on the basis of including longer-term investment returns. EEV and IFRS operating profit is stated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions, the shareholders' share of actuarial and other gains and losses on defined benefit pension schemes, and the effect of disposal and results of the Taiwan agency business, for which the sale process was completed in June 2009. In addition for EEV basis results, operating profit excludes the effect of changes in economic assumptions and the time value of cost of options and guarantees, and the market value movement on core borrowings.6 There will be a conference call today for wire services at 07.30am (BST) hosted by Mark Tucker, Group Chief Executive and Tidjane Thiam, Chief Financial Officer and Group Chief Executive-designate. Dial in telephone number: 020 8609 0793. Passcode: 797476#7 A presentation to analysts will take place at 09.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. An audio cast of the presentation and the presentation slides will be available on the Group's website, www.prudential.co.uk/prudential-plc/8 High resolution photographs are available to the media free of charge at www.newscast.co.uk on +44 (0) 207 608 1000 or by calling Sunita Patel on 020 7548 2466.9 Total number of Prudential plc shares in issue as at 30 June 2009 was 2,523,718,245.10 Financial Calendar 2009: Third Quarter 2009 Interim Management Statement 28 October 2009 2009 Interim Dividend Ex-dividend date 19 August 2009 Record date 21 August 2009 Payment of dividend 24 September 200911 About Prudential plcPrudential plc is a company incorporated and with itsprincipal place of business in England, and its affiliatedcompanies constitute one of the world's leading financialservices groups. It provides insurance and financialservices through its subsidiaries and affiliatesthroughout the world. It has been in existence for over160 years and has GBP245 billion in assets under management(as at 30 June 2009). Prudential plc is not affiliated inany manner with Prudential Financial, Inc, a company whoseprincipal place of business is in the United States ofAmerica.Forward-Looking StatementsThis statement may contain certain "forward-lookingstatements" with respect to certain of Prudential's plansand its current goals and expectations relating to itsfuture financial condition, performance, results, strategyand objectives. Statements containing the words "believes","intends", "expects", "plans", "seeks" and "anticipates",and words of similar meaning, are forward-looking. Bytheir nature, all forward-looking statements involve riskand uncertainty because they relate to future events andcircumstances which are beyond Prudential's controlincluding among other things, UK domestic and globaleconomic and business conditions, market related riskssuch as fluctuations in interest rates and exchange rates,and the performance of financial markets generally; thepolicies and actions of regulatory authorities, theimpact of competition, inflation, and deflation;experience in particular with regard to mortality andmorbidity trends, lapse rates and policy renewal rates;the timing, impact and other uncertainties of futureacquisitions or combinations within relevant industries;and the impact of changes in capital, solvency oraccounting standards, and tax and other legislation andregulations in the jurisdictions in which Prudential andits affiliates operate. This may for example result inchanges to assumptions used for determining results ofoperations or re-estimations of reserves for futurepolicy benefits. As a result, Prudential's actual futurefinancial condition, performance and results may differmaterially from the plans, goals, and expectations setforth in Prudential's forward-looking statements.Prudential undertakes no obligation to update theforward-looking statements contained in this statementor any other forward-looking statements it may make.To view the full text of this press release, paste thefollowing links into your web browser:http://www.rns-pdf.londonstockexchange.com/rns/3636X_1-2009-8-12.pdfhttp://www.rns-pdf.londonstockexchange.com/rns/3636X_3-2009-8-12.pdf12.pdfhttp://www.rns-pdf.londonstockexchange.com/rns/3636X_2-2009-8-12.pdf This information is provided by RNSThe company news service from the London Stock ExchangeEND