UNIQA Insurance Group AG expects to report first-half profit of between €38 million and €43 million, compared to €91.3 million in the year-ago period, after Veneto Banca SpA's insolvency triggered a contractual guarantee related to the sale of the Austrian insurer's Italian subsidiaries.
In December 2016, when UNIQA agreed to sell its Italian units to Società Reale Mutua di Assicurazioni for €295 million, it guaranteed up to €40 million for a sales cooperation with Veneto Banca that was valid until 2019.
However, UNIQA said Intesa Sanpaolo SpA, which acquired part of Veneto's operations, has indicated that it will "most probably" not adopt the sales cooperation, thus requiring UNIQA to make the contractually assured payments in full and face a one-off negative effect on its results from discontinued operations.
UNIQA, which will publish its second-quarter results Aug. 23, also expects to report first half pretax earnings of between €90 million and €96 million, up from €86.6 million in the first six months of 2016.
It confirmed its full-year 2017 pretax guidance earnings guidance, which is for a slight improvement from the €225.5 million booked in 2016, and said it still plans to slightly increase its dividend per share for 2017 compared to the prior year.