28 Aug 2024

Prudential plc 2024 Half Year Results

Links to supplementary information about this release:
Full news release and business review and risk factors
IFRS disclosure
EEV statements
Additional unaudited financial information
2024 half year financial supplement

PRUDENTIAL PLC HALF YEAR 2024 RESULTS: PROGRESS CONTINUES IN 2024

Prudential plc (“Prudential”; HKEX: 2378; LSE: PRU) today announced its financial results for the six months ended 30 June 2024.

Performance highlights on a constant (and actual) exchange rate basis

• New business profit of $1,468 million. This was up 8 per cent (6 per cent) excluding the effect of interest rate and other economic impacts and up 1 per cent (down (1) per cent) after allowing for these impacts
• Adjusted operating profit up 9 per cent (6 per cent) to $1,544 million
• First interim dividend of 6.84 cents per share (2023: 6.26 cents per share on an AER basis), up 9 per cent
• First tranche of $2 billion share buyback in execution. As at 22 August 2024, 22 million shares have been repurchased for £150 million ($192 million)
• EEV shareholders' equity (before minority interests) equivalent to 1,644 cents per share (31 December 2023: 1,650 cents per share on an AER basis). After minority interests EEV shareholders' equity was 1,575 cents per share.
• Free surplus ratio of 232 per cent (31 December 2023: 242 per cent) and a GWS shareholder capital surplus over GPCR of $15.2 billion, equivalent to a cover ratio of 282 per cent (31 December 2023: 295 per cent)

Commenting on the Results, CEO Anil Wadhwani, said:

"We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027, namely a compounded annual growth rate for new business profit of 15 to 20 per cent and double-digit for cash generation, both measured from a 2022 base. In the first half of 2024, we delivered high quality new business profit growth of 8 per cent alongside increased margins, on an ex-economics basis, and adjusted operating profit up 9 per cent. This followed exceptional growth of 47 per cent (excluding economic impacts) in new business profit for the full year 2023, resulting from the strong rebound in Hong Kong after the removal of Covid restrictions and the opening of the border with the Chinese Mainland. We announced a $2 billion share buyback programme, to return capital to shareholders while we continue to invest in growth opportunities.”

Business commentary

Our resilient performance in the first half of 2024 was achieved having taken steps to reposition our business in the Chinese Mainland ahead of both regulatory and macro-economic changes. We also took decisive action on medical repricing in Indonesia and Malaysia in advance of the market. Other markets such as Singapore, India and Taiwan have performed well given our continued product innovation and expansion of distribution capabilities. Over the past year, we have been gaining momentum in executing our strategy, addressing known challenges, and identifying areas for continued improvement. We are strengthening our capabilities across our pillars and enablers and reinforcing this with senior leadership appointments in key areas of the business. We are focused on more effectively converting new business profit to cash, managing operational variances and seeking to leverage benefits of scale.

In distribution while agency new business profit was lower in the first half of 2024 given the high base effects in the 2023 comparative period in many markets, we are intensifying our efforts on the underlying drivers of agency growth with a focus on quality recruitment, training and embedding PRUForce, our digital agency platform. Bancassurance performed strongly with 28 per cent growth in new business profit in the first half of 2024, excluding the effect of interest rate and other economic impacts, with Hong Kong, Malaysia, Singapore, Taiwan and Thailand being notable markets. We have continued to demonstrate our capital allocation discipline, focusing on quality new business, investment in capabilities and a capital management programme.

Outlook

We have seen a pick up in sales momentum in June, which continues into the second half of the year. In respect of 2024, new business profits are expected to grow at an annual rate consistent with that required to meet our 2022-2027 new business profit growth objective. The structural drivers of growth in Asia and Africa for our industry remain intact, with ongoing strong demand in respect of protection, long-term savings and retirement propositions as broader based economic growth returns to our markets. We continue to be confident in achieving our 2027 financial and strategic objectives.

Notes

The summary financials presented above are the key financial metrics Prudential's management use to assess and manage the performance and position of the business. In addition to the metrics prepared in accordance with IFRS standards - IFRS profit after tax and IFRS shareholders' equity - additional metrics are prepared on alternative bases. The presentation of these key metrics is not intended to be considered as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS Standards. The definitions of the key metrics we use to discuss our performance in this press release are set out in the "Definition of performance metrics" section later in this document, including, where relevant, references to where these metrics are reconciled to the most directly comparable IFRS measure. All metrics used by management to assess performance (along with IFRS profit after tax) are before deducting the amount attributable to non-controlling interest. This presentation is applied consistently throughout this announcement.

Balance sheet metrics are presented net of non-controlling interests. For 2024 non-controlling interests include the 49 per cent non-controlling interest in our conventional life business in Malaysia.

New business profit excluding economic impacts (and the movements therein) represents the amount of new business profit for the first six months of 2024 calculated using economics (including interest rates) as at 30 June 2023 and average exchange rates for the first six months of 2024. The percentage change excluding economics excludes the impact of the change in interest rates and other economic movements in the period from that applicable to the new business profit in the first half of 2023, and applies consistent average exchange rates from the first half of 2024.

Contact:

We expect to announce our Half Year 2024 Results to the Hong Kong Stock Exchange and to the UK Financial Media at 12.00pm HKT – 5.00am UKT – 12.00am ET on Wednesday, 28 August.

The announcement will be released on the London Stock Exchange at 2.00pm HKT – 7.00am UKT – 2.00am ET on Wednesday, 28 August.

A pre-recorded presentation for analysts and investors will be available on-demand from 12.00pm HKT – 5.00am UKT – 12.00am ET on Wednesday, 28 August 2024 using the following link: https://www.investis-live.com/prudential/66aa2fe6c09582120022eb13/okyd. A copy of the script used in the recorded video will also be available from 12.00pm HKT – 5.00am UKT – 12.00am ET on Wednesday, 28 August 2024 on Prudential plc’s website.

A virtual Q&A event for analysts and investors will be held at 4.30pm HKT – 9.30am UKT – 4.30am ET on Wednesday, 28 August.

Registration to view the Q&A event online

To register to watch the event and submit questions online, please do so via the following link: https://www.investis-live.com/prudential/66aa30c063626025001d4e1b/wbed.

The webcast will be available to watch afterwards using the same link.

Dial-in details

A dial-in facility will be available to listen to the event and ask questions: please allow 15 minutes ahead of the start time to join the call (lines open half an hour before the call is due to start, i.e. from 4.00pm HKT – 9.00am UKT – 4.00am ET).

Dial-in: +44 (0) 20 3936 2999 (UK and international) / 0800 358 1035 (Freephone UK)/Global dial-in numbers: https://www.netroadshow.com/events/global-numbers?confId=69809, Participant access code: 368356. Once participants have entered this code their name and company details will be taken.

Transcript

Following the call a transcript will be published on the results centre page of Prudential's website on Monday, 2 September.

Playback facility

Please use the following for a playback facility: +44 (0) 20 3936 3001 (UK and international), replay code 672842. This will be available from approximately 9.00pm HKT – 2.00pm UKT – 9.00am ET on Wednesday, 28 August until 6.59am HKT on Thursday, 12 September – 11.59pm UKT – 6.59pm ET on Wednesday, 11 September 2024.

About Prudential plc

Prudential plc provides life and health insurance and asset management in 24 markets across Asia and Africa. Prudential’s mission is to be the most trusted partner and protector for this generation and generations to come, by providing simple and accessible financial and health solutions. The business has dual primary listings on the Stock Exchange of Hong Kong (2378) and the London Stock Exchange (PRU). It also has a secondary listing on the Singapore Stock Exchange (K6S) and a listing on the New York Stock Exchange (PUK) in the form of American Depositary Receipts. It is a constituent of the Hang Seng Composite Index and is also included for trading in the Shenzhen-Hong Kong Stock Connect programme and the Shanghai-Hong Kong Stock Connect programme.

Prudential is not affiliated in any manner with Prudential Financial, Inc. a company whose principal place of business is in the United States of America, nor with The Prudential Assurance Company Limited, a subsidiary of M&G plc, a company incorporated in the United Kingdom.

https://www.prudentialplc.com/