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Loss in H2 forces Axa to cut dividend

AXA SA, Europe's second-largest insurer, posted a second-half loss for the first time in seven years and cut its dividend as the biggest slump in stock markets since the Great Depression eroded the value of investments.

The net loss totaled 1.24 billion euros (US$1.56 billion), compared with a net income of 2.49 billion euros a year earlier. That beat the 1.76-billion-euro loss estimated by 13 analysts surveyed by Bloomberg News. Axa cut its dividend 67 percent to 40 cents a share, it said yesterday in an e-mailed statement.

"The 2008 financial market turmoil was unprecedented and had a significant impact upon our industry," Chief Executive Officer Henri de Castries said in the statement. "2009 will be another challenging year."

The largest decline in equity markets since the 1930s has cut the value of Axa's investments, reduced fees from money management and dented demand for life-insurance policies linked to stock. De Castries said in November that the assumptions backing the company's 2012 profit goals "have dramatically changed."

Axa's operating profit, which excludes investment swings and merger-related costs, fell 19 percent to 4.04 billion euros last year. That beat analysts' estimates of 3.79 billion euros.

The insurer said in November that the market plunge makes its goal of doubling revenue and tripling earnings between 2004 and 2012 "increasingly obsolete."

Axa said it saw a 2008 operating profit between 3.6 billion euros to 4 billion euros.


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