Prudential PLC First Half 2023 Results

Prudential PLC is set to release its first-half 2023 results on Wednesday. Here are the key details you need to know:

Operating Profit Forecast

According to a consensus compiled by the company, the Asia and Africa-focused insurer and asset manager is expected to report a total IFRS operating profit of $1.38 billion for the six months ended June 30. The adjusted operating profit for 2022, restated under the new IFRS 17 accounting framework, was $2.72 billion, which is $653 million lower than the previous figure. However, Prudential did not provide a restated figure for the first half.

Annual Premium Equivalent Forecast

Prudential, listed in London and Hong Kong, is anticipated to post an Annual Premium Equivalent (APE) of $2.93 billion for the period. This is compared to $2.21 billion in the previous year.

New Business Profit Forecast

The company's New Business Profit (NBP), another embedded value metric, is estimated to be $1.46 billion for the half-year. This is an improvement from the previous year's $1.10 billion.

What to Watch

STRATEGY UPDATE: Anil Wadhwani Outlines Priorities

Anil Wadhwani, who assumed the role of chief executive in February, is set to provide a comprehensive update on his strategic priorities along with the latest results. Analysts anticipate that the focus will be on reducing the group's reliance on Greater China, with UBS analysts highlighting Hong Kong and its Mainland China Visitor business as potential areas of interest. Deutsche Bank analysts also expect discussions on diversifying operations throughout Asia to drive sales and earnings across the continent.

Improved Performance Indicators and Growth Targets Await
Market observers are keenly awaiting the introduction of clearer key performance indicators and growth targets to bridge existing gaps. Citi analysts suggest that new metrics, such as new business premiums or free surplus emergence, could be incorporated. Deutsche Bank, on the other hand, mentions potential targets related to sales, contractual service margin, or return on earnings.

Evolutionary Strategy for the Future
"We believe that the new CEO's strategy is more likely to evolve rather than undergo a radical transformation," states Deutsche Bank analyst Rhea Shah in a note. Shah points out that implementing large-scale changes across multiple Asian and African markets, given the group's extensive reach, presents inherent challenges.

Capital Returns:

Prudential's Interim Dividend Forecast

Consensus estimates suggest that Prudential, a well-known financial institution, will declare an interim dividend of 6.24 cents per share in contrast to its previous year's payout of 5.74 pence.

According to UBS analysts, Prudential has sufficient financial resources to initiate a share buyback. With a surplus of $8 billion and the capacity to take on $1.6 billion in debt, the group is in a strong position. However, considering the recent formation of a new management team, it is unlikely that a share buyback program will be announced at this stage.