·         AMP’s profit, after tax, but before other items was A$495 million

·         There was a bottom line loss of $896 million, after write-downs and restructuring costs of A$1,571 million, relating to a total review of the company

·         The final dividend was A$0.20, taking total dividend for the year to A$0.46.

 

Why has AMP’s financial performance dropped?

The A$896 million loss was not a trading loss but a result of write-downs and restructuring costs.  These have been incurred in the short-term as part of plans to focus the business on doing the basics really well.

 

While AMP’s overall profit for 2002, is lower than 2001 as a result of the tough markets being faced by all wealth management companies, it was still a solid A$495 million.

 

Why has AMP rewarded Board members and executives when the company has announced a loss?

Payments made to executives who left AMP last year are part of the cost of changing the management team at AMP to help turn the business around.

 

In order to be able to try and turn the performance of AMP around, the CEO, Andrew Mohl, had to make some tough decisions quickly. Some of these decisions have resulted in short term cost to the company, but we are confident they are the right decisions and will create long-term value for customers and shareholders.

 

Who is responsible for all these board changes?

The Board restructure is the result of a unanimous Board decision that new Directors are needed to help improve AMP’s performance.

 

The Board recognises that shareholders and customers, and all the people who have an interest in AMP, are disappointed with AMP.   The board decided it is time for a change and renewal at AMP’s Board level.

 

Is AMP in financial trouble?

No. AMP remains a strong company with sound operating businesses, low debt levels and total shareholder capital resources of more than A$13 billion.

 

Why doesn’t AMP sell the UK business?

AMP has more than A$7 billion of shareholder capital invested in the UK and are extremely focused on its protection. 

 

Why has AMP’s share price been so badly impacted?

AMP has investments around the world so, when markets rise and fall, the value of its investments is affected. In turn, this affects how the market sees the value of its shares and the level of demand for these shares.

 

AMP has a large amount of money invested in the UK and, like many other life funds with similar investments, has suffered from significant falls in the UK share market over the past three years.

 

What about AMP’s Australian business?

The Australian Financial Services business remains strong. 

 

According to the latest report issued by independent investment researchers, ASSIRT, as at the end of December 2002, AMP Australian Financial Services was still the third most popular place for Australians to invest their savings in retail managed funds.  The last three months of 2002 saw a marked decrease in the overall amount Australians invested in retail managed funds and several companies experienced falls in their rankings, AMP was not one of those companies.

 

AMP’s retail managed funds including managed funds and superannuation represents about 12% of the market in Australia.  AMP remains committed to managing this money carefully and responsibly.

 

AMP and your superannuation

 

Is my superannuation safe?

In Australia and New Zealand, the company has more assets than the regulators in these countries require it to hold, so it is still a very secure company.

 

How does the share price impact my superannuation?

The impact of AMP's profitability and share price on your superannuation is minimal. The only connection between your super and AMP's ongoing performance is that some investment options (those that invest in Australian shares) will hold some AMP shares. These would account for a very small percentage of the total assets of such an investment option.

 

The reserve levels in AMP’s statutory funds, which back many of AMP’s superannuation products, are only marginally impacted by the share price. These funds invest in a wide range of assets, offering diversification to ensure less exposure to volatile returns.

 

Our superannuation money is not used to make up for shareholder funds

The money invested in your superannuation fund cannot be transferred to shareholder funds.  It is a requirement of the Australian Prudential Regulatory Authority (the industry regulator), that AMP keep separate accounts for both investors and shareholders. 

 

Therefore, AMP cannot use your super money to make up for shareholder losses, should they come about. This means your super policy is well protected in the extremely unlikely event that anything happens to AMP.

 

Like to know more?

If you would like to know more or have any additional queries, speak to your financial planner or to the contacts below.

 

For more information:

•  Talk to your AMP Financial Planner

•  Phone us on 133 888 or

• If you have any queries about your shares, phone the AMP Shareholder Information Line on 1300 654 442