The Prudential office in Hong Kong, China Photo: CFP

British insurance giant Prudential said on Wednesday that net profits slumped by nearly 40 percent last year, as it suffered from turbulence in emerging markets.

Earnings after taxation sank to 1.346 billion pounds ($2.24 billion) in 2013 on short-term fluctuations in investment values, Prudential said in a results statement.

That compared with net profit of 2.163 billion pounds in 2012.

The group noted however that earnings before tax and interest payments, rose 17 percent to 2.954 billion pounds.

Total sales meanwhile grew by 5.4 percent to 4.423 billion pounds last year, boosted by Asia.

"The group has delivered a strong performance in 2013," said chief executive Tidjane Thiam in the earnings release.

"Our focus on execution across our geographic markets of Asia, the US and the UK has delivered profitable growth and increasing cash generation," he noted.

He cautioned however that the outlook was clouded by the impact of the US Federal Reserve's stimulus tapering - particularly on emerging markets.

"Looking ahead, we believe that the global economic outlook is improving," Thiam said.

"However, investment markets are impacted by short-term volatility as the market adjusts to policy normalization in the US.

"The macroeconomic adjustments that we are seeing in emerging markets... are ultimately a net positive for these countries and regions."

The insurer recommended increasing its shareholder dividend to 33.57 pence per share.

"We have seen some aggressive weakness in emerging markets (EM) that have had a negative effect on profitability," said Atif Latif, director of trading at Guardian Stockbrokers.

"Net (profit) is down with the losses in EM but we remain convinced that strong cash generation and increased dividend payouts will attract more money into this sector and in particular Prudential," Latif said.

AFP - Global Times