Phoenix Financial (PHOE) Q4 2022 earnings summary

Executive summary

• 2022 comprehensive income was NIS 1,124m, down from NIS 2,316m in 2021; ROE was 11.4%. Q4 comprehensive income was NIS 526m, with 23.0% ROE.

• Pre-tax operating profit reached NIS 1,796m in 2022, while asset management, distribution and credit contributed NIS 624m before tax, up from NIS 453m in 2021.

• Core operations grew across insurance, asset management, distribution and credit; year-end AUM was NIS 371b.

• Strategic priorities include expanding higher-ROE, capital-efficient and fee-based activities, technology investment, active portfolio management and client focus.

Financial highlights

• Q4 2022 comprehensive income was NIS 526m; pre-tax operating profit was NIS 458m, versus NIS 283m in Q4 2021.

• Premiums, contracts and contributions reached NIS 19.7b in 2022, up from NIS 19.1b in 2021.

• Non-insurance core businesses generated NIS 314m after tax, excluding special items; asset management, distribution and credit generated NIS 624m pre-tax.

• Comprehensive income declined amid capital-market impacts, despite operating profit growth; 2022 operations income was NIS 1.8b.

Outlook and guidance

• 2025 targets include NIS 1.3–1.5b comprehensive income and 12%–15% ROE, based on a 3% investment-return assumption; non-insurance core income target is NIS 650–700m.

• Other 2025 targets include NIS 11–13b shareholders’ equity and NIS 450–550b AUM; the strategy plan includes NIS 1b of technology investment.

• 2023 priorities include managing volatility, investing in capabilities, client focus, strategic opportunities and expanded ESG strategy and reporting.

• Medium-term targets include P&C premiums above NIS 4b and agency revenue of NIS 900m–1b; acquisitions remain under consideration where strategic and economically suitable.

• Motor pricing and cost-management changes are expected to improve business impact over coming quarters; 3% real returns are a planning assumption, with a five-year average basis for expectations to exceed it over time.