Prudential beats forecasts at half-year stage thanks to strong trading in Asia

Prudential easily beat analysts' profit forecasts at the half-year stage thanks to strong trading in Asia and said it had met its target for surplus cash generation ahead of schedule.

Operating profits were 5% higher to £2.4bn (consensus: £2.02bn) on an IFRS basis and at constant exchange rates but 15% ahead at current exchange rates.

Also at constant exchange rates, operating profits in Asia grew by 18% to £1.09bn and in the US by 7% to £1.08bn.

New business profit at its Asian life business rose 18%, alongside £2.3bn of external net inflows at its Eastspring asset management business.

In parallel, in UK life retail, annual premium equivalent sales increased 22% to £721m with sales at PruFund ahead by 29% to £564m.

External asset management net inflows at M&G meanwhile were at £7.2bn.

The group's solvency surplus was estimated at £12.9bn for a coverage ratio of roughly 202%.

Meanwhile, underlying free surplus cash generation hit £1.8bn, meaning that it reached its target for £10bn in surplus cash generation between 1 January 2014 and 31 December 2017 six months ahea of plan.

On an after tax basis, net profits jumped 109% to £1.51bn with basic earnings per share up by 118% to 58.7p.

In a separate announcement, the company said it would combine its M & G and Prudential UK & Europe to create M & G Prudential.

Commenting on the outlook, the life insurer expressed confidence even while conceding that global economic conditions remained "uncertain and markets remain volatile".

As as aside, the group touted the outlook for growth in Africa, drawing a comparison with Asia 20 years beforehand.

The interim dividend was increased 12% to 14.5p per share, in-line with its policy for payouts.

As of 1120 BST, shares of Prudential were 0.60% lower to 1,830.50p.