AMP warns 03 profit will fall if equity markets slide further

By NZPA

Wednesday 26th February 2003

Financial services giant AMP Ltd today warned that the group's profit would fall again in 2003 if equity markets continued to slide.

The comments, made by chief executive Andrew Mohl, came as AMP reported a net loss of $A896 million ($NZ971.27 million) for calendar 2002 and cut its final dividend payment to shareholders.

Shares in AMP, whose key markets are Australia, Britain and New Zealand, last traded in New Zealand up 5c at $NZ8.30. Trading had been suspended prior to the announcement.

In Australia they closed down 2.3 percent at $A7.92 on Tuesday, 60 percent down in the past year amid extended investment market slump, plans to halve its global workforce and sweeping changes to the senior management team.

Mr Mohl said AMP was soundly capitalised and all its UK life entities were exceeding the minimum capital requirements.

AMP had also put in place several instruments including derivatives and hedging to reduce AMP's sensitivity to further falls on equity markets.

Mr Mohl said if the UK's FTSE 100 index fell below 3000 points, shareholders funds would be protected and AMP's UK Financial Services division would not need another capital injection.

"There are no plans for an equity capital raising at this time," he told journalists.

"We don't know what the future holds so never say never.

"Obviously we have the ability to raise debt funding if we need to and there will be some scope to do that."

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