Generali ended 2012 with a net profit of 90 million, down by 89,5% compared to 856 million in 2011 due to net write-downs of 1,682 billion, of which 1,271 billion in the fourth quarter alone. The Operating income on the other hand, it stood at over 4,2 billion (+10,5%), exceeding the consensus estimates, which indicated it at 4,1 billion. Confirmed at 0,20 euros the dividend per share, in line with 2011.
Accounts in line with expectations at an operational level have given wings to Generali's share on the Stock Exchange, which gains more than five and a half points within an hour of opening, clearly leading the rises of the Ftse Mib. “Overall, these are solid results that can support the stock after it underperformed ahead of their release,” comments one analyst.
Le devaluations in the fourth quarter are linked to available-for-sale securities (792 million), the investment in Telco (148 million), loans and receivables (118 million), real estate (56 million) and other assets (156 million). Capital strengthened with the growth of shareholders' equity to 19,8 billion (+28%). The Solvency I it rose to 150% (from 117% in 2011) with a surplus of nine billion.
As for industrial performance, total premiums amounted to 70 billion euro (+3,2%), of which more than 70% written abroad. In particular, in Life gross premiums rose to 46,8 billion (+3,1%), boosted by savings products (+5,8%), with operating profit growing to 2,7 billion (+9,7 %). In Non-Life gross premiums rose to 22,8 billion (+3,3%), recording growth in all segments, with an operating profit rising to 1,7 billion (+5,6%) and a marked improvement in the combined ratio to 95,7% (from 96,5% in 2011). In the financial segment, the operating result amounted to 408 million (+21,7%), with "a good performance by Banca Generali".
“In 2012 we embarked on a profound transformation of Generali and today's results mark a turning point in the evolution of our group towards international best practice – commented the CEO, Mario Greco -. We have recently presented the new strategy, based on the introduction of discipline, simplicity and focus in all our activities. We are simplifying the structure and adopting a more disciplined approach to group and investment management, focusing on our insurance business. The growth in the operating result demonstrates the excellent quality of our industrial business. The progress achieved by the Solvency I index proves that we have initiated capital strengthening actions, which will continue in the coming years. The stability of the dividend attests to our ongoing commitment to adequately remunerate our shareholders even in a phase of capital strengthening".
As for 2013, “the first quarter is going well for now – continued Greco -. I don't know how we'll close it because it's early, but the data I hear coming from our countries is positive data. Cost cuts are starting to deliver the expected benefits. I expect a good result."
For the current year, Generali expects "an improvement in the overall operating result, continuing both in the capital strengthening process and in the expense reduction program announced in January", continues the note.
Finally, Greco confirmed that “there are no updates on divestments. We are moving forward with our plan and do not see any particular obstacles. The proceedings are proceeding as planned. We are counting on informing you of the final outcome of these operations as soon as possible”.
