Prudential’s (PRU) underlying first-half performance was much better than the headline figures suggest. Although negative returns on fixed income securities slashed reported IFRS profits, underlying profits rose by 22 per cent to £1.42bn. Moreover, profits on an embedded value basis grew by a third to £2.51bn. Finances remained in good shape, too, with free cash surplus generated rising from £1.03bn to £1.15bn. The regulatory capital surplus, after taking off the cost of the interim dividend, remained solid at £3.9bn.
The life assurer also made strong progress towards achieving the six growth and cash objectives set out in 2010 to be achieved by the end of this year. Two were achieved last year, and the group added two more by exceeding the full-year £260m cash objective from its US Jackson operation by £34m at the half-way stage, and surpassing its £3.8bn four-year group cumulative net cash remittance objective by generating £4.1bn of remittances. Management is confident that it will deliver the two remaining objectives, which are to double Asia’s 2009 new business profits and to generate over £350m of net remittances from the UK.