Last week AXA SA released its 1H15 results. In a word ‘boring’ (remembering boring is good for debt investors)
AXA SA reported another set of solid results. Revenue and profit numbers continue to increase modestly and capital and gearing levels slowly improve. Whilst the 1H15 results were considered ‘boring’, these trends are more than enough for debt investors. We continue to expect AXA SA to call their subordinated debt and Tier 1 securities at first opportunity and consider them ‘fair value’ at current levels.
Key figures from the results included:
- Total Revenues up 2%, driven by growth in all business lines
- Underlying Earnings up 2% to EUR3.1bn, mainly driven by Life & Savings and Asset Management segments
- Shareholders' equity was up EUR1.7bn from six months earlier to EUR66.9bn, driven by favourable forex movements and profit contribution
- Solvency I ratio was at 258%, down 8 percentage points on the 31 December 2014 reading, as lower unrealised capital gains followed an increase in interest rates
- Economic solvency ratio was at 215%, up 14 percentage points on six months prior, due to operating return contribution and favourable forex movements
- Debt gearing continued to fall and is now 23%, down from 24% at 31 December 2014
For further details see AXA's 2015 Half Year Earnings presentation or associated documents.