Generali Reports Record Operating Profit in 2021, as Board Battle Looms
Generali also said it continued to monitor the situation in Russia and Ukraine where it had only a marginal exposure of 683 million euros ($751 million) at the end of 2021.
Its specific exposure to listed assets was lowered to 78 million euros [$85.8 million] at March 7, from 299 million euros [$328.8 million] at the end of 2021, it said in post-results call slides.
“It reduces some concerns on the stock,” analysts at Morgan Stanley wrote in a note.
Earlier this month, Generali said it would shut down its operations in Russia and it is also giving up its seats on the board of Ingosstrakh, one of Russia’s largest insurers in which it holds a 38.5% stake.
“We no longer have any influence on the management of Ingosstrakh,” Chief Executive Philippe Donnet said without elaborating on the future of the stake.
The head of finance Cristiano Borean said the depreciation of the rouble brought the market value of the Ingosstrakh stake below its book value of 231 million euros [$254 million] but it was too early to say if a write off was needed.
Last year Generali’s operating profit, the figure most closely watched by the market, rose 12.4% to 5.9 billion euros ($6.5 billion), above an analyst consensus compiled by the insurer of 5.7 billion euros [$6.26 billion].
Shares in the company were little changed in mid-morning trade, outperforming weaker European blue chip and insurance sector indices.
Generali is facing a battle over its board composition at a vote late next month.
Late on Monday the outgoing board submitted its own slate of nominees indicating Donnet as candidate for the CEO job and Andrea Sironi as chairman.
Its second-biggest investor, construction tycoon Francesco Gaetano Caltagirone, plans to put forward his own candidate to lead Italy’s biggest insurer, challenging the reappointment of Donnet.
Generali’s net profit stood at 2.85 billion euros [$3.13 billion], up 63.3%, slightly above a consensus of 2.82 billion euros [$3.09 billion].
The insurer’s solvency ratio, which measures its financial strength, stood at 227% at the end of December and rose to above 230% at March 11, Borean said.
($1 = 0.9093 euros)
(Reporting by Gianluca Semeraro; editing by Agnieszka Flak and Keith Weir)