Assicurazioni Generali Raises Dividend 11% as Profit Rises -- Update
March 16 2017 - 4:29AM
Dow Jones News
By Giovanni Legorano
ROME--Italian insurer Assicurazioni Generali SpA (G.MI) said
Thursday it plans to raise its dividend for 2016 by 11% from the
year before after reporting its best net profit performance in nine
years.
The company said it plans to pay a EUR0.80 dividend a share for
last year, compared with the EUR0.72 for 2015. Net profit for the
year rose 2.5% to 2.1 billion euros ($2.2 billion).
The Trieste-based insurer said net profit was buoyed by an
improved performance across different segments of its business and
lower costs.
In November Generali pledged to accelerate a strategic
turnaround it launched in 2015 by exiting unprofitable businesses
and cutting operating costs.
At the time, the Italian insurer said it planned to generate at
least EUR1 billion by selling businesses it deemed to be less
attractive. It also said it planned to restructure its operations
in mature markets to save EUR200 million in operating costs, while
making investments in growing markets.
In 2015, Generali launched a big commercial push in Europe, Asia
and Latin America to improve cash flow in the following four years,
with gains to be returned to its shareholders through fatter
dividends instead of spending on acquisitions.
According to the plan, the company aims to generate more than
EUR7 billion in cash flow between 2015 and 2018 and raise the
dividend payout to over EUR5 billion for the four years to
2018.
At the end of last year, the company had generated EUR3.5
billion in net operating cash and has reached EUR2.4 billion in
cumulative dividends.
On Thursday, Generali said it had brought forward its target
date to deliver EUR200 million in cost cuts by one year to
2018.
Generali confirmed that despite challenging macroeconomic
conditions and volatile financial markets, it expects to increase
shareholders' dividends for this year in line with its strategic
plan.
In January, the company emerged as a potential acquisition
target after Italian lender Intesa Sanpaolo SpA (ISP.MI) said it
was weighing a tie-up with Generali, a prospect it abandoned a
month later.
Generali Chief Executive Philippe Donnet vowed to maintain the
company as "independent, Italian and with an international
vocation."
-Write to Giovanni Legorano at giovanni.leograno@wsj.com
(END) Dow Jones Newswires
March 16, 2017 04:14 ET (08:14 GMT)
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