Solid results from Prudential bump up share price

British insurer Prudential was the top climber on the FTSE this morning after it reported a 22 per cent increase in operating profit and basic earnings per share, rising to a respective £1.42bn and 42.2p.

However, net income more than halved, falling by 57 per cent to £506m.

Chief executive Tidjane Thiam said:

Prudential has produced a strong performance across our key financial metrics of IFRS operating profit, new business profit and cash during the first six months of 2013. Our focus on meeting the needs of our customers with well-designed products, on executing our strategy with discipline and on managing risk effectively has continued to allow us to deliver profitable growth and to generate increasing levels of cash.

Dismissing fears of a slowdown in Asia, Thiam added the region remains a "significant opportunity".

Asia remains a significant opportunity for the Group, underpinned by favourable structural trends of faster economic growth, leading to higher wealth combined with high savings rates and rising demand for protection. This is particularly true of the rapidly growing and increasingly wealthy Asian middle class. These opportunities are most evident in our sweet-spot markets of South-east Asia, including Hong Kong, where the combination of long-term structural trends and the breadth and depth of the Prudential franchise and distribution allow us to achieve long term sustainable and profitable growth.

Prudential said it had achieved a further two of its six “Growth and Cash” objectives set in 2010 to be achieved by the end of 2013, with Jackson Life Insurance exceeding its full year 2013 cash objective of £260m (£294m) and the group as a whole beating its four-year cumulative net cash remittance objective of £3.8 billion (£4.1bn).

This is in addition to the two achieved at the end of 2012, with Asia doubling its 2009 IFRS operating profit and of delivering more than £300 million of net remittances. Asia remains a significant focus for the group. Thiam said he was “confident” Prudential could achieve the remaining two objectives on time.

The company said its first half performance against a backdrop of volatility relating to tapering concerns "highlights the resilience of our earnings and cash generation to challenging operating conditions".

It added it was ready for the implementation of Solvency II, despite the considerable uncertainty surrounding the regulation due to delays.

Prudential raised its interim dividend 15.8 per cent to 9.73 pence per share. The share price rose by 0.84 per cent on the news to £11.94, at one point increasing over four per cent.

Prudential is rated AA by Standard & Poor's, Aa2 by Moody's and AA by Fitch.