Manulife Financial Corp profit slides 62% as energy investments take a hit: ‘A disappointing year’

Oil and gas investment losses hurt Manulife Financial's fourth quarter profit.

TORONTO – Energy exposure hit the conclusion of Manulife Financial Corp. in the fourth quarter, resulting in the shares to slide by as much as 12 percent in Thursday trading despite a nine percent hike within the dividend.

Quarterly net earnings missed analyst estimates and included a $361 million charge on “investment-related experience” – with the bulk of that because of oil and gas holdings.

“For the 3rd time in 2015, Manulife incurred significant investment losses related to its energy investments,” Barclays Capital analyst John Aiken wrote inside a note to clients.

“The ongoing uncertainty in oil and the broader macro outlook has management concerned,” he wrote, adding that leader Don Guloien and the management team are “backing away” from a $4 billion core earnings target for 2016.

Guloien told analysts on the conference call that “it was a disappointing year when it comes to net gain, largely due to sharp mark-to-market declines in gas and oil prices, diminishing a normally great year.”


However, he indicated that confidence in the insurance giant’s capital levels and earnings growth momentum, besides the investment-related issues, caused Manulife to raise its quarterly dividend to 18.5 cents from 17 cents.

Guloien noted that insurance sales were up 24 percent in fiscal 2015, with Asia adding to a level larger rise in start up business value.


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