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Legal & General posted an after-tax loss of 91 million pounds (106.8 million euros), up from a loss of 27 million pounds for the same period a year earlier.
The group reported a 92% fall in interim operating profit to 31 million pounds, while cutting its dividend 45% to 1.11 pence (1.29 euro cents) from 2.01 pence.
The results were calculated on the basis of the International Financial Reporting Standard. When based on European Embedded Value, the after-tax loss was 720 million pounds, compared with a profit of 73 million pounds a year earlier. EEV operating profit rose 12% to 657 million pounds from 589 million pounds.
The group's risk business saw a loss of 128 million pounds in the first half, compared with a 75 million pound profit a year earlier. The savings business fell to a 5 million pound loss from a profit of 111 million pounds. These losses were attributed to the negative effects of foreign exchange hedging costs and lower than expected interest rates.
?We have made strong progress in improving our net cash generation, strengthening our balance sheet and reducing costs," said Group Chief Executive Tim Breedon in a statement.
Breedon said performance was good in risk and investment management, while Legal & General's savings operation "turned the corner."
Legal & General (LSE: LGEN) said it generated net cash of 302 million pounds during the first half, down from 320 million pounds for the same period in 2008. The group said it expects to generate 450 million pounds in net cash for all of 2009. Legal & General said its cost cutting strategy is "on track," with 50 million pounds in savings on an annualized basis expected by the end of this year.
New business totaled 746 million pounds, down from 806 million pounds in the first six months of last year. Legal & General said it benefited from "robust" sales and a favorable product mix.
Legal & General will concentrate on the strength of its capital and cash positions, Breedon said. This will involve taking advantage of "synergies between risk, savings and investment management ," he said.
While the financial markets are showing renewed confidence, Breedon said, "we expect some continued uncertainty for the remainder of 2009."
Legal & General was trading at 61.55 pence on the afternoon of Aug. 4, down 5.67% from the previous close.
(By Robert O'Connor, London editor: Robert.OConnor@ambest.com)
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