Canada's Manulife hits C$4 billion profit milestone
By Matt Scuffham
TORONTO (Reuters) - Canada's biggest insurer Manulife Financial Corp (MFC.TO: Quote) met a long-held target to achieve an annual profit of C$4 billion in 2016 while exceeding analyst expectations, helped by a strong performance in Asia.
The performance represents a landmark for Manulife, which initially set a goal in 2012 to achieve annual earnings of C$4 billion ($3.1 billion) by 2015 but later pushed back its expectation to 2016, citing tougher economic conditions.
The company then warned last February it would be difficult to achieve the target in 2016, partly because weak oil prices had hit the value of its investments in the energy sector. However, a partial recovery in the price of oil and a better performance from its fixed income investments helped it achieve the milestone.
"Earlier in the year I was not sure that we would achieve that and that's a real landmark for the company. I think it bodes very well for us as an organization," Chief Financial Officer Steve Roder said in an interview on Thursday.
The company's core earnings, excluding one-off items and market movements, totaled C$4.02 billion ($3.06 billion), or C$1.96 Canadian cents per share in the full year, compared with C$3.43 million, or C$1.68 Canadian cents per share, a year earlier. Analysts on average had expected earnings of C$1.85 per share, according to Thomson Reuters I/B/E/S.
That growth was driven by investment gains of C$197 million and benefited from improved results in Asia, where insurance sales surged by a record 27 percent compared to 2015.
"Underlying earnings growth remained impressive, particularly in Asia, which should continue to fuel a positive outlook," said analyst John Aiken of Barclays Capital in Toronto.
Manulife reported an 11 percent increase in its quarterly dividend to C$0.205 per share. Continued...