Profits already higher than full 2014 and 2016 coupon growing. Assicurazioni Generali closed the first nine months of the year with a net profit of 1,7 billion, up by 8,7% and higher than the 1,5 billion achieved in the same period of 2014. In the conference call with the agencies of press, and then also in the next one with analysts, the CFO Alberto Minali confirmed the target of over five billion in cumulative dividends in four years: a goal in line with the generation of capital that the group can produce in this period of time.
“We confirm once again that over the next four years we will pay cumulative dividends of over 5 billion euros, which means that we will certainly next year's coupon will have to increase – said Minali – cash generation is very important to us and this is an element that we keep under control”, “in all the operating units of the group cash generation is increasing and therefore the cash flows that are arriving at the parent company are significant".
The market in the early afternoon does not reward the stock, which moves weakly down by 0,92% while the Ftse Mib rises by 0,21%. Operators focused on third quarter profits which stopped at 420 million, down 18% from 513 in the same period a year earlier and especially against the 555 million indicated by the Bloomberg consensus. The result was penalized by the reduction in operating profit in the life business and by higher write-downs due to market volatility. “We expect a good fourth quarter – assured Minali – and we are confident that the profits for the whole year will be significantly higher than last year's”.
THESolvency I index was 166% (+2 pp compared to the end of 2014) while the Economic Solventi ratio, which is based on a new internal model based on a series of European rules on capital (called Solvency II) which will be operational from 2016, it stood at 196%.
Overall, the initial reactions from analysts are positive. Analysts Barclays, which title the first note after the results over 9 months "Small miss, Economic Solvency Better", note that operating profit of 1.061 million euros is down 3% compared to consensus" but also that "at an operational level, momentum remains solid in the life sector (although slightly slowing down) and continues to improve in the non-life business despite already high margins”. Furthermore, they underline that "the Economic Solvency ratio stood at 196%, only 4 points less than in the previous quarter and above the consensus of 190% thanks to the positive impact of the tightening of sovereign spreads which partly compensated for other negative movements in the market".
For analysts of ubs it is “a decent set of numbers, with stronger capital and operating results continuing to be achieved in the P&C sector, both positive factors”
In a conference call with news agencies, Minali then ruled out that the group would take the field in M&A. "We don't plan to make acquisitions at the moment", he said, recalling that the recent one made on MyDrive was "very specific and selective", in order to give the group a set of skills. Finally, commenting on the exit of Generali from the list of systemic financial institutions (Sifi) decided in recent days by the Financial Stability Board, he said: it is "a confirmation" and also "an acknowledgment of the reality of a group that becomes only an insurance group".
The CEO Mario Greco has in fact concentrated on the core insurance business by selling the peripheral units to increase profitability. "It means once again that all the work done in our business on the insurance business - added Minali - finds for us a confirmation in the decision of the FSB". For SIFIs, international legislation provides for higher capital requirements.
