NN Group 2H Operating Result Missed Views|Earnings Review.
NN Group NV reported a lower-than-expected operating result for the second half of 2022 on Thursday, as well as a new share buyback in accordance with its policy.Here is what we saw:
OPERATING RESULT: The insurance and asset-management firm reported an operating result—a key industry metric—of 760 million euros ($914.4 million) for the six months ended Dec. 31, falling short of the EUR857 million expected in a company-compiled consensus.The decrease from last year’s EUR917 million was attributed primarily to the sale of its asset-management business, NN Investment Partners.
OPERATING CAPITAL GENERATION: The Dutch group generated EUR812 million in operating capital for the half-year period, exceeding a consensus of EUR780 million and exceeding the previous year’s EUR804 million due to higher contributions from Netherlands Life and Insurance Europe.
WHAT WE WATCHED:
-NET RESULT: NN Group reported a net loss of EUR444 million for the six months ended December 31, dragged down by negative real-estate revaluations and equity security impairments.
This compares to a net profit of EUR1.86 billion in the second half of 2021, which included gains on the sale of public equities and government bonds and positive real-estate revaluations.
The company-compiled consensus provided no estimate for this metric, but a FactSet forecast based on two analysts’ estimates predicted a net profit of EUR741.5 million for the half-year.
-SOLVENCY II RATIO:As of December 31, the company’s solvency II ratio—a measure of financial stability—was 197%, exceeding the expected 192%.
-CAPITAL DISTRIBUTION:In line with its capital return policy and analyst expectations, the insurer and asset manager announced a EUR250 million share buyback.
It proposed a final dividend of EUR1.79 per share, up from the EUR1.70 per share expected by consensus, bringing the total yearly payout to EUR2.79 per share, 12% higher than the previous year.
