Manulife Reports Third-Quarter Drop in Net Income, Hurt by Oil and Gas Investments
November 13, 2015 by Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com
TORONTO – Manulife Financial Corp. reported a steep decline in third-quarter net income available to shareholders, due to losses in its oil and gas investments, the company said in its earnings statement.
Net income attributable to shareholders fell to C$622 million (US$468.9 million) from C$1.1 billion in the prior year. “The decline in net income attributed to shareholders was primarily due to fair value losses related to oil and gas investments in 3Q15, compared with overall strong investment-related experience in the third quarter of 2014,” Manulife stated.
Total revenue also fell to C$7.1 billion from C$10.9 billion , the company said.
Overall insurance sales rose 12% to C$803 million, the company reported.
Insurance sales in the Asian division reached US$379.5 million, up 19%, led by double-digit percent gains in Japan, Hong Kong and Singapore, but a 13% decrease in Indonesia, Manulife said.
In Canada, retail insurance sales of C$47 million increased by 15%, driven by strong universal life, term product and living benefits sales, according to the company.
U.S. insurance sales under the John Hancock brand hit US$126 million, a 2% increase, driven by sales of term, universal life and variable universal life products and international UL sales, Manulife said.
“We delivered strong operating results in the third quarter, including double digit growth in insurance sales and positive net flows in our wealth and asset management businesses,” said Donald Guloien, president and chief executive officer, in the earnings report.
The operating insurance members of Manulife Financial have a current Best’s Financial Strength Rating of A+ (Superior)
In morning trading Nov. 12, shares of Manulife Financial (NYSE: MFC) were $16.29, down 2.46% from their previous close.
