TOWER Australia Group has reported a 13 per cent increase in half-year underlying profit as its core life insurance business continues to perform strongly despite the economic downturn.
But according to the insurer, it has not been immune to falling investment markets, which has wiped $12.3 million, or 35 per cent, off the net revenue of its investment business.
Tower’s underlying profit for the six months to March 31 was $38.2 million, up $4.3 million from a year ago.
Its net profit after tax was $27.1 million, down 12 per cent, and managing director Jim Minto attributes this largely to falling investment markets.
“Investment markets did several big things to us: certainly funds under management fell … so management fees on those amounts have dropped and that caused significant declines in the earnings of the investment business,” Mr Minto said.
The company believes underlying profit provides the most accurate measure of its performance because it removes short-term unrealised gains and losses, allowing different periods to be compared more easily.
Source The Australian
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