SUNCORP WEATHERS DISASTERS WITH $1.1B PROFIT
Written on the 5 August 2015
A SPATE of natural disasters have failed to dampen Suncorp Group's (ASX:SUN) bottom line, with the financial institution posting a full-year profit of $1.13 billion.
Despite its insurance arm recording its "worst year" of natural hazard events, net profit after tax was up 55 per cent from $730 million in FY14.
Suncorp's return on equity target took a battering, after responding to thousands of claims in relation to Cyclone Marcia, severe thunderstorms and hailstorms in Queensland and NSW.
The net impact of $1.068 billion from natural disasters was almost double its allowance of $595 million.
Outgoing Suncorp CEO Patrick Snowball (pictured) says it was an achievement for the group to deliver a strong result in the wake of a number of weather catastrophes.
"I'm proud that Suncorp has been able to increase profit and dividend in a year of terrible weather events and at the same time deliver exceptional customer service," Snowball says.
"This demonstrates that Suncorp's diversification across General Insurance, Banking and Life is delivering a resilient earnings profile.
"The Building Blocks, Simplification and Optimisation projects are allowing Suncorp to grow its customer base while maintaining strong margins."
Simplification initiatives have cut $225 million in costs in FY15, with plans to bump this up to $265 million in FY16. A further $170 million of efficiency benefits will be delivered by 2018 as part of the optimisation program.
The board has declared a final ordinary dividend of 38 cents per share and a special dividend of 12 cents per share as a result of the group's improved financial position.
Suncorp chairman Ziggy Switkowski says total dividends for the year represent a payout of 100 per cent of the group's net profit.
"Following payment of the dividends, Suncorp will continue to have a very conservative balance sheet," Switkowski says.
"The strong excess capital position of $570 million provides the group with flexibility in its capital management, including the ability to make further capital returns in the future."
Both dividends are fully franked and will be paid on September 22.