Suncorp Group Ltd., an Australian lender and insurer, headed for the biggest daily decline in almost six months after reporting a lower-than-expected interim dividend and amid concerns flooding in January will impact full- year profit.
Shares fell 4.3 percent to A$11.17 at 11:36 a.m. in Sydney, on course for the biggest one-day drop since Aug. 27. The benchmark S&P/ASX 200 Index gained 0.3 percent. Suncorp increased its interim dividend for the six months ended Dec. 31 to 25 Australian cents a share from 20 cents a year earlier, compared with the median forecast of five analysts surveyed by Bloomberg News for 27 cents.
While benign weather and reduced claims in the first half helped the Brisbane-based company increase net income by 48 percent, flooding and a cyclone in Queensland state in January has already taken natural hazard claims to as much as A$417 million ($431 million), compared with a full-year allowance of A$520 million, Suncorp said. The dividend payout ratio was 52 percent of cash earnings, down from 59 percent in the same period of 2011 and less than the full-year target of 60 percent to 80 percent, according to a regulatory filing.
The ratio “‘is at odds with a company who claims to have a very strong capital position and potential for further special dividends in the future,’’ said Andrew Adams, an analyst with Credit Suisse Group AG. ‘‘With up to A$417 million of their weather allowance already used to date, it does highlight the downside risk to second half earnings.’’
Net income rose to A$574 million in the six months ended Dec. 31 from A$389 million a year earlier, the company said. That compares with a forecast of A$567.7 million based on the average of three analyst estimates compiled by Bloomberg. Gross written premium increased 9.6 percent to A$4.23 billion.
Operational efficiencies, revenue growth, favorable investment markets and relatively benign weather conditions all contributed to the improved result, the company said in the statement.
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