AMP Ltd (ASX: AMP) shares opened sharply lower this morning following the release of the company's FY20 results. At the time of writing, the AMP share price is trading at $1.40, down 9.09% for the day so far.
Let's take a look at what the company had to say.
What's driving the AMP share price lower?
The AMP share price is once again on the slide after the company advised in its investor report that coronavirus significantly impacted its annual outcomes across all business units.
During FY20, the company held $255 billion of total assets under management (AUM), 6% lower than during FY19. AUM-based revenue fell approximately 10.5% to roughly $1.5 billion.
AMP reported an underlying net profit after tax (NPAT) of $295 million, a 33% decline compared to the $439 million delivered in FY19.
The AMP share price is coming under pressure on news the company did not declare a final FY20 dividend. This decision was based on the board presently assessing AMP's portfolio, current market conditions and overall business performance.
According to AMP, the board intends to pay dividends, execute a share buyback program and carry out additional capital initiatives in 2021.
AMP CEO comments on poor performance
Commenting on the company's annual performance and overall business environment, CEO Franceso De Farria said:
Volatility in markets and the economic downturn impacted the investments and financial security of many Australians and New Zealanders. True to our long-term purpose, AMP stepped up to support our clients navigate the uncertainty, providing early access to their super, pauses on their mortgage repayments, relief on their rent, and advice and guidance when needed.
AMP stated that it continues to progress its three-year transformation strategy, amid challenging market conditions.
Mr De Farria continued that:
Underpinning our strategy, we have also accelerated our cultural transformation and are determined to drive a culture of inclusion, accountability and high performance.
The cultural transformation initiative follows AMP's August 2020 scandal in which two previous CEOs, Bob Pahari and Alex Wade, stepped down following matters involving sexual harassment.
AMP share price and company snapshot
AMP is a financial services company that operates in Australia and New Zealand. It provides a range of services including superannuation, life insurance, investments and advice. It also offers retail banking services, has partnerships in China and Japan and investments around the world.
The AMP share price has fallen by more than 70% over the past five years and by nearly 10% since the start of this year alone.
Based on the current AMP share price, the company has a market capitalisation of around $5.29 billion with 3.44 billion shares outstanding.
