STOREBRAND ASA: Preliminary results for the 1st quarter
Impact from tax gains and effects from COVID-19 and economic turmoil
Storebrand continues to grow its core business with 7 per cent currency adjusted (11 per cent unadjusted) growth in fee income in the quarter, but due to tax gains, COVID-19 and financial market turmoil, Storebrand will report numbers deviating from market expectations for the first quarter.
Storebrand has in the quarter strengthened the reserves for all insurance products with disability coverages. NAV, the Norwegian Labour and Welfare Administration, has as of 22 April 2020 registered 359,197 applications for welfare benefits from workers affected by temporary layoffs.
The insurance results are negatively affected by an increase in observed and expected jobless claims in Norway. Storebrand has conducted a forward-looking model review based on the unfolding of the current economic situation and strengthened the reserves for all insurance products with disability coverages. The operating profit from the Insurance segment is expected to be minus NOK 246 million, corresponding to a combined ratio of 124%.
Group operating profit is expected to be NOK 254 million.
Financial results are affected by the market turmoil. The group financial result is negatively impacted by mark to market losses caused mainly by credit spread widening. The Financial results in the group accounts is expected to be minus NOK 588 million for the quarter. The negative results are primarily related to the company portfolios. Return in Storebrand Livsforsikring AS' company portfolio was minus 1.25% in the quarter.
A tax income of NOK 717 million will be booked in the first quarter. This is a result of new information and interpretation of the transition rules of 2018 as well as tax losses from currency hedging of the Swedish subsidiary SPP in the first quarter.
Group profit after tax is expected to be NOK 264 million for the first quarter.
The numbers are provisional, unaudited, and changes may occur until the reporting date 30 april.
Lysaker, 23 April 2020
For further information contact:
Group Head of Finance, Strategy and M&A, Kjetil R. Krøkje, mobile +47 934 12 155
Head of Investor Relations and Rating, Daniel Sundahl, mobile +47 913 61 899
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Storebrand's ambition is to be the best provider of saving for pensions. Storebrand will deliver sustainable solutions adapted to the customer's individual situation, so that each person receives a better pension in a more sustainable world. Storebrand has about 40.000 corporate customers and 2 million individual customers, and has its headquarter at Lysaker outside of Oslo, Norway. Storebrand manages NOK 831 bn and is Norway's largest private asset manager. We work hard to fulfil our vision: Recommended by our customers. Storebrand (STB) is listed on Oslo Stock Exchange. Visit us at www.storebrand.no and follow us on Twitter: @Storebrand_no