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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  AMP Limited    AMP   AU000000AMP6

AMP LIMITED

(AMP)
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Australia's AMP warns of half-year profit plunge, blames virus

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07/30/2020 | 06:26pm EDT

* AMP H1 underlying earnings to miss expectations

* Australian wealth unit sees outflows of A$4.4 bln

* Company says AMP Capital fees fall by 40%

* Serious revenue, margin deterioration - Credit Suisse

* AMP shares fall 12%; full results due Aug. 13

SYDNEY, July 31 (Reuters) - AMP Ltd, Australia's largest financial advisory firm, said on Friday it expects its first-half underlying profit to more than halve, blaming the coronavirus pandemic and unsettled markets for a slump in fee income and higher credit losses.

Shares in the scandal-hit firm plunged 12% following the warning and the disclosure of A$4.4 billion ($3.2 billion) in net outflows from its Australian wealth arm after the government eased rules on withdrawals from pension funds due to the pandemic.

The 171-year old company expects underlying profit from its retained businesses of A$140 million to A$150 million. That was lower than the A$309 million it reported a year earlier, and 13% lower than expected, according to Refinitiv data.

It said performance and transaction fees at its investment arm AMP Capital were expected to fall by 40%, while its bank would set aside about A$25 million to cover potential credit losses.

The announcement comes amid a company revamp by Chief Executive Officer Francesco De Ferrari following a bruising public inquiry into the finance sector that found widespread misconduct at AMP, including improperly charging fees and attempting to deceive regulators.

In a statement, De Ferrari said the firm was still committed to saving A$300 million a year, but warned the pandemic had impacted the "pace" of its cost reduction program.

"There is some serious revenue margin deterioration or large cost issues in the half," Credit Suisse analysts said in a note, adding that uncertainty around how permanent the earnings hit will be was likely to weigh on investor sentiment.

AMP will release the full details of its first half results and update the market on capital management plans, its strategy and a new plan for its funds management arm AMP Capital on Aug. 13.

($1 = 1.3916 Australian dollars) (Reporting by Paulina Duran in Sydney; additional reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Maju Samuel and Richard Pullin)

Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED 1.40% 1.445 End-of-day quote.-24.54%
CREDIT SUISSE GROUP AG -1.51% 9.878 Delayed Quote.-23.50%
FERRARI N.V. -0.05% 186.64 Delayed Quote.12.75%
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Financials
Sales 2020 355 M 255 M 255 M
Net income 2020 -129 M -93,1 M -93,1 M
Net Debt 2020 18 129 M 13 065 M 13 065 M
P/E ratio 2020 -37,7x
Yield 2020 1,18%
Capitalization 4 923 M 3 552 M 3 548 M
EV / Sales 2020 65,0x
EV / Sales 2021 39,6x
Nbr of Employees 6 500
Free-Float 98,5%
Chart AMP LIMITED
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AMP Limited Technical Analysis Chart | AMP | AU000000AMP6 | MarketScreener
Technical analysis trends AMP LIMITED
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 11
Average target price 1,63 AUD
Last Close Price 1,45 AUD
Spread / Highest target 66,1%
Spread / Average Target 12,9%
Spread / Lowest Target -17,0%
EPS Revisions
Managers
NameTitle
Francesco de Ferrari Chief Executive Officer & Executive Director
David Victor Murray Independent Non-Executive Chairman
James Georgeson Chief Financial Officer
John K. O'Sullivan Independent Non-Executive Director
John Arthur Fraser Independent Non-Executive Director
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