Euler Hermes net profit -47%
28-07-2008
28 july
Credit insurer Euler Hermes said its first-half net profit fell by nearly a half as the global economic slowdown led to a higher number of claims.
In a statement released on Monday afternoon, the company said its net profit was 122.3 million euros, down 47.1 percent from 231.2 million, while operating income fell 43.9 percent to 201.5 million euros from 359.3 million.
Sales reached 1.084 billion euros, up 3 percent from 1.052 billion, or up 5.5 percent at constant exchange rates and scope.
Euler Hermes said its net claims ratio increased to 63.7 percent from 45.8 percent at the end of June 2007, reflecting a rise in overdue and business insolvencies resulting from a worsening economy.
The company also cited lower capital gains versus the year-earlier period as a factor weighing on profits.
At the same time, it said cost control had enabled it to lower its cost ratio to 18.8 percent from 20.3 percent in the first quarter, although this was up from 17.5 percent in the first half of 2007.
'As far as the countries which are already affected by the economic slowdown are concerned (US, UK, Italy, Spain) Euler Hermes has taken the appropriate measures in terms of credit risk underwriting and is also reviewing the commercial conditions in the contracts,' the company said.
In France and Germany, which are now also experiencing a slowdown, the company said it is also taking risk prevention measures.
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