Phoenix Financial (PHOE) Q2 2024 earnings summary

Executive summary

• H1 comprehensive income attributable to shareholders was NIS 667m, with 12.8% ROE; Q2 comprehensive income was NIS 383m, with 15.1% ROE.

• H1 core income reached NIS 869m and core ROE was 16.7%; Q2 core comprehensive income was NIS 548m, with 21.9% core ROE.

• AUM reached NIS 480bn, up 11% in H1, including growth from the Psagot acquisition; core growth put 2025 targets ahead of schedule.

• Ownership became dispersed after international investors acquired shares from former controlling shareholders.

Financial highlights

• H1 net income attributable to shareholders was NIS 636m versus NIS 1.6m; Q2 was NIS 418m versus NIS 59m.

• H1 total income was NIS 13.83bn versus NIS 12.05bn; Q2 total income was NIS 4.96bn versus NIS 7.83bn, reflecting lower investment income.

• H1 income per share was NIS 2.65; basic EPS was NIS 2.51. Q2 income per share was NIS 1.52 and basic EPS was NIS 2.75.

• Adjusted EBITDA for Asset Management, Distribution and Credit was NIS 567m in H1, versus NIS 459m a year earlier.

• Shareholders’ equity was NIS 10.8bn at June 30, 2024.

Outlook and guidance

• Existing 2025 targets include NIS 1.3bn–1.5bn core comprehensive income, NIS 450bn–550bn AUM and 12%–15% ROE; updated targets and a roadmap were due September 9, 2024.

• Core ROE of 16.7% exceeded the 2025 target range, and AUM and core income targets were described as achieved ahead of schedule.

• IFRS 17 and IFRS 9 adoption in Israel was scheduled for January 1, 2025, with transition date January 1, 2024.

• Lower business and developer credit demand and cautious underwriting were expected to constrain credit-portfolio growth.