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AMP to cut dividend by 33%

Last updated: 01:00 13 Feb 2009 AEDT, First published: 00:00 13 Feb 2009 AEDT

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Leading financial services group AMP (ASX:AMP) today provided a market update on its expected 2008 profit, dividend, capital position and cashflows, ahead of the release of its full year results next Thursday, 19 February.

AMP said it would declare a final dividend of 16c a share when it meets to review and approve the audited full year results for 2008 next week.  This is a 33 per cent reduction from the 24 cents dividend paid last year.

AMP expects its 2008 underlying profit to be around A$800 million (FY 07 A$882 million), which is in line with market expectations. Underlying profit is AMP’s key measure of business profitability as it removes investment market volatility and is the earnings base from which the Board’s decisions relating to dividends are derived.

A final dividend of 16c would bring AMP’s total dividend for 2008 to 38c a share, plus an additional 2c a share distributed in the first half of the year from the proceeds of the Cobalt/Gordian sale.

Mr Dunn said AMP was providing early guidance on the likely dividend declaration because current market expectations were tracking higher than the expected outcome.

“We understand the impact a lower than expected dividend has on our large shareholder base, particularly when times are tough. But as a Board we recognise the need to make some tough calls in the short term to ensure the best long term outcomes for the company and our shareholders."

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