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Earnings season wrap-up: 26 February

Nicholas Grove/Christine St Anne  |  26 Feb 2013Text size  Decrease  Increase  |  

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Nicholas Grove is a Morningstar journalist and Christine St Anne is Morningstar's online editor.


Companies covered in this report:

• QBE Insurance Group (QBE)
• Oil Search (OSH)


QBE's profit up 8pc, improved performance expected

QBE Insurance Group (QBE) on Tuesday announced an 8 per cent increase in profit for the year to 31 December 2012.

Profit after income tax attributable to ordinary equity holders of the company was US$761 million, compared to US$704 million in 2011.

Higher-than-expected amortisation and impairment expenses drove the bottom-line profit well below Morningstar's forecast.

"We retain our positive view on the stock and expect a sustained earnings recovery over the next year, with a strong uplift in profits for the full year," Morningstar head of financial services Asia Pacific David Ellis said.

A final dividend of 10 Australian cents a share fully franked was declared. Dividends were 50 Australian cents a share for the year, down 43 per cent on the previous corresponding period.

While the dividends did not surprise, Ellis said the highlight was the investment earnings lift.

Investment earnings were up 57 per cent to US$1.2 billion due to an increase in the investment portfolio to US$31.5 billion, with net yield improving to 4.1 per cent on the previous corresponding period.

"Importantly, capital continued to grow due to raisings and organic generation, alleviating the need to raise additional capital. This is a big plus, as concerns of a potential capital raising have been weighing on the stock," Ellis said.