Generali delays dividend payout, profit beats estimates

MILAN (Reuters) - Italy's top insurer Generali GASI.MI said on Thursday it would delay the payment of the second tranche of 2019 dividends to next year to comply with regulatory demands, after reporting nine-month operating profits above expectations.

FILE PHOTO: The logo of insurance company Generali is seen on the company headquarters in Budapest, Hungary, November 29, 2019. Picture taken November 29, 2019. REUTERS/Tamas Kaszas

Italy’s insurance regulator IVASS has asked companies, including Generali, not to pay dividends following recommendations from the European Systemic Risk Board (ESRB) to conserve cash in the coronavirus emergency.

Generali said it still aimed to pay out 4.5-5 billion euros ($5.5-$5.9 billion) in dividends under a three-year plan to 2021.

Generali’s solvency ratio, a key measure of financial strength, had risen to 207% by Nov. 9, after reaching a better-than-expected 203% at the end of September, Chief Financial Officer Cristiano Borean told a press briefing on nine-month results.

“It is somewhat disappointing that despite Generali’s strong underlying performance the regulator has prevented the group from paying the second tranche of the dividend,” Jefferies analysts wrote in a note.

In May, Generali paid a first tranche of the 2019 dividend of 0.50 euros per shares out of a total of 0.96 euros.

The insurance group’s nine-month operating profit, most closely watched by investors, beat analysts’ estimates, rising to 4 billion euros ($4.7 billion), up 2.3% from a year earlier.

Net profit fell 40% to 1.3 billion euros, after 666 million euros in one-off items, partially related to writedowns on COVID-linked market volatility, just above an analysts’ consensus forecast of 1.28 billion euros.

Taking into account the negative impact from financial markets and from some one-off expenses, operating and net results in 2020 are expected to be lower year-on-year, Generali said.

“Underlying performance was better than forecast, which bodes well for the future,” the Jefferies analysts added.

Shares in the company were down 0.5% at 0841 GMT, roughly in line with Italy's blue-chip index .FTMIB.

($1 = 0.8499 euros)

Reporting by Gianluca Semeraro; Editing by Mark Potter