Prudential (PRU) H1 2024 earnings summary

Executive summary

• New business profit grew 8% ex-economics to $1.5 billion in H1 2024, building on a strong 2023, with growth diversified across products and channels.

• Operating profit increased 9% year-over-year to $1.5 billion, supported by a strong in-force portfolio and disciplined capital deployment.

• A $2 billion share buyback was launched in June 2024, with $18 million completed by period end and $700 million expected by end 2024.

• Interim dividend for 2024 was raised by 9% to $188 million (6.84¢ per share).

• Strategic focus remains on high-quality, sustainable growth, operational efficiency, and capability enhancement, with significant investments in digital, talent, and product innovation.

Financial highlights

• New business profit (NBP) up 8% ex-economics to $1.5 billion; reported NBP up 1% due to economic effects.

• Adjusted/IFRS operating profit rose 9% to $1.5 billion; insurance profits up 6%.

• Embedded value at $43.3 billion; operating profit up 9%; return on embedded value (ROEV) at 11%.

• Gross operating free surplus generation (OFSG) was $1.4 billion, down 4% but in line with 2027 targets.

• Free surplus ratio at 232%, down from year-end, reflecting dividend payments and non-operating effects.

• Regulatory shareholder cover ratio at 282% with a $15.2 billion surplus.

Outlook and guidance

• Confident in achieving 2027 objectives: $4.4 billion gross OFSG and 15%-20% NBP CAGR from 2022-2027.

• New business profit growth for full year 2024 expected to align with strategic trajectory and 2022–2027 CAGR target.

• Sales momentum in June and into H2 2024 is strong, with base effects from 2023 comparators easing.

• Positive cash flow momentum and improved product/pricing mix expected to enhance future cash generation.

• TEV will replace EEV reporting from Q1 2025, with no change to NBP CAGR or Gross OFSG objectives.