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Storebrand posts YOY fall in Q4'17 net profit, sets new dividend policy

Storebrand ASA reported fourth-quarter 2017 group net profit of 494 million Norwegian kroner, down from 676 million kroner earned in the same period in 2016.

EPS for the quarter was 1.04 kroner, compared to the year-ago 1.50 kroner. The S&P Capital IQ consensus estimate for normalized EPS for the period was 1.32 kroner.

Fee and administration income totaled 1.53 billion kroner in the fourth quarter of 2017, compared to 1.15 billion kroner a year earlier.

In insurance, the group posted a result of 261 million kroner for the quarter, down from the year-ago 251 million kroner. Total portfolio premiums totaled 4.46 billion kroner, compared to 4.50 billion kroner a year earlier.

The combined ratio was 93% for the period, compared to 91% for the same period of 2016.

The group's operating profit totaled 803 million kroner for the period, up from the year-ago 528 million kroner, although operating costs rose over the same period to 992 million kroner from 868 million kroner.

Storebrand booked amortization and write-downs of intangible assets of 237 million kroner in the fourth quarter of 2017, compared to 95 million kroner in the year-ago period.

The group saw AUM rise to 721.17 billion kroner in the fourth quarter of 2017 from 625.84 billion kroner in the previous quarter.

For full year 2017, group net profit was 2.41 billion kroner, up from 2.14 billion kroner in 2016. EPS was 5.28 kroner, compared to 4.73 kroner for 2016.

Storebrand's board proposed a dividend of 2.50 kroner per share for 2017, comprising an ordinary dividend of 2.10 kroner and a special dividend of 40 øre. In 2016, the company paid only an ordinary dividend of 1.55 kroner.

The board also proposed a new dividend policy beginning 2018 that will see Storebrand distribute more than 50% of its after-tax result as dividends. The board intends to pay ordinary dividends per share of at least the same nominal amount as the previous year. Ordinary dividends are subject to a sustainable solvency margin of above 150%, and if the solvency margin is above 180%, the board intends to propose special dividends or share buybacks.

As of the end of 2017, the company's Solvency II ratio was 172%, including transitional rules, and 155% excluding transitional regulations, compared to 160% and 150%, respectively, at the end of the third quarter of 2017. "Strong results, increased buffer capital and issuance of subordinated debt capital have contributed to strengthening the Solvency margin for the quarter," the company said.

As of Feb. 6, US$1 was equivalent to 7.84 Norwegian kroner.