British insurance giant Aviva, which owns Hibernian here, said today that it had bounced back into the black in the first half of 2009 as the group boosted profit margins and cut costs amid an uncertain economic climate.
The group said in a results statement that it made a net profit of £747m sterling in the six months to the end of June. That compared with a loss after tax of £84m in the first half of 2008.
Aviva said life and pension sales in Ireland, where it owns Hibernian, were down 47%, reflecting the sharp decline in the market due to the recession. It said customers had been influenced by volatile stock markets, the slowdown in economic growth and property market uncertainty.
The value of new business was £4m, 50% lower than a year earlier, and margins fell from 1.2% to 0.9%.
Aviva also revealed that it planned a partial stock market flotation of its Dutch subsidiary, Delta Lloyd, on Euronext Amsterdam. It said that its total life and pensions new business sales fell 4% to £17.47 billion, compared with £18.2 billion last time around.
The group also slashed its interim shareholder dividend by 31% to nine pence per share.
'In a challenging economic environment Aviva has returned to profit,' its CEO Andrew Moss said in the earnings release.
'Life and pensions margins have improved, the general insurance business has beaten our targets and our regulatory capital position has strengthened significantly,' he added.
The group acknowledged that recent financial markets turbulence had adversely affected earnings - but said it had countered this via efficiency savings.
Moss said the part-flotation of Delta Lloyd would allow Aviva 'to free up capital for use elsewhere and will allow Delta Lloyd to pursue its ambitions in the Benelux region.'
'These actions, together with ongoing focus on cost management and the sale of Aviva Australia, will significantly increase our strategic flexibility,' he added.
Aviva had agreed to sell its Australian life and pensions business last month to National Australia Bank (NAB) for £452m. The company expects to complete the sale of Aviva Australia Holdings - which also includes a wealth management arm - in the third quarter of 2009 after passing regulatory hurdles.
