Company Announcements

TEL-AVIV, Israel--(BUSINESS WIRE)--May 29, 2024-- Phoenix Holdings Ltd., a leading Israel-based financial, insurance, and investment group (TLV:PHOE) (“Phoenix,” the “Group,” or the “Company”), today reported its results for the first quarter of 2024.

Highlights

Income and return on equity

• Phoenix Holdings Ltd. reports NIS 284 million in comprehensive income for the first quarter of 2024 and 11.2% in return on equity;
• Core comprehensive income totaled NIS 322 million (net of capital market effects above and below a real return of 3%, interest rate effects and special items), which reflects a core return on equity of 12.7%;
• Income from the Insurance business totaled NIS 193 million and income from the Asset Management and Credit business totaled NIS 129 million, representing 40% of the total core income;

Growth in profitability and activities

• Phoenix reports income growth to NIS 129 in Asset Management and Credit activities (including Retirement, Investment House and Wealth, Distribution, and Credit), compared to NIS 100 million in the first quarter of 2023;
• P&C Insurance shows consistent growth and improved profitability;
• Adjusted EBITDA for the Asset Management and Credit business totaled NIS 281 million on a consolidated basis, including minority interests (236 NISm net of the minority interests), compared to NIS 223 million in the first quarter of 2023;
• Total assets under management increased by 10% compared to the end of 2023, reaching approximately NIS 472 billion, including the active fund management activities acquired from Psagot, which was completed in March 2024;
• In the Credit segment, Phoenix Construction Finance was merged into Gama, while the Group’s total credit portfolio is estimated at approximately NIS 5.6 billion; and
• Phoenix has made significant progress towards meeting its strategic targets for 2025 and is current reviewing targets and growth engines, and intends to update growth targets in the near term.

Financial resilience

• The Group has a strong financial profile characterized by liquid balances, low net debt, and a high solvency ratio in Phoenix Insurance of 194% with transitional measures as of December 31, 2023;
• International credit agency Moody's reiterated the existing A2 rating of The Phoenix Insurance Company and negative outlook.

Dividend Policy

• The Group's strategic growth, including in its Asset Management and Credit activities, has generated growing cash flows and driven consistent dividend distributions. Accordingly, Phoenix’s Board of Directors approved a revised dividend distribution policy, increasing the dividend payout to at least 40% of annual comprehensive income (compared to 30% under the prior policy). The new dividend policy will apply to income in 2024 and will be reflected in the next distribution after the publication of the Company’s first half financial statements.

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Eyal Ben Simon, CEO of Phoenix Holdings:

"Since October 7, Israel has been at war on multiple fronts. Phoenix is committed to the resilience of Israeli society and continues to high-impact organizations and ventures with both resources and volunteering. Our hearts go out to the families of the fallen, and we pray for the quick return of the hostages and for the recovery of the wounded.

During the first quarter of 2024, the Israeli economy continued to be characterized by uncertainty and volatility in the capital markets. As a leading financial group, Phoenix works to leverage its wide range of services and activities for the benefit of its clients, while carefully managing risks and maximizing business opportunities. The Group remains focused on strategic execution, including growth in core Insurance and core Asset Management and Credit activities as well as improving profitability. The Group is also actively working to maximize value for its shareholders through the diversification and growth of cash flows, a regular and steady dividend distribution, and share buybacks.

The results for the first quarter of 2024 reflect the continued growth in total assets under management, an improvement of the EBITDA in the Asset Management and Credit business, and an increase in comprehensive income compared to the corresponding quarter last year. The Group is on track to achieve its targets for 2025. Growing and diversifying cash flows, robust financial stability, and the insurance subsidiary’s solvency ratio, which is considered the highest in the industry, enables us to revise our dividend distribution policy upwards, which now represents a payout of at least 40% of comprehensive income."

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Below are financial statement highlights:

Comprehensive income attributable to shareholders

In the first quarter of 2024, comprehensive income attributable to shareholders amounted to NIS 284 million, reflecting a return on equity of 11.2% for shareholders, compared to a return on equity of approximately 3.3% in the corresponding quarter last year. The comprehensive income in the first quarter of 2024 was achieved despite the economic challenges and non-operating negative effect (effect of the capital market of more and less than a 3% real return, interest rate effects, and special items) of NIS 38 million in 2023.

Core income (net of non-operating effects, including capital markets above and under a real return of 3%, interest rate effects and special items)

Core income increased to approximately 322 million in the first quarter of 2024, reflecting a 12.7% core return on equity, compared to approximately NIS 301 million in the corresponding quarter last year, which reflected a 12.4% core return on equity.

Core income from insurance activity totaled NIS 193 million in the first quarter of 2024, compared to NIS 201 million in the corresponding period last year, and core income from Asset Management and Credit totaled NIS 129 million in the first quarter of 2024, compared to NIS 100 million in the corresponding period last year.

Equity capital and total assets under management

Shareholders equity

Equity attributable to Company’s shareholders totaled NIS 10.6 billion as of March 31, 2024.

Assets under management

Total assets under management continued to increased, reaching NIS 472 billion as of March 31, 2024, including approximately NIS 22 billion in traditional funds activity acquired from Psagot in March 2024.

The Group is ahead of its strategic targets for 2025 and is currently reviewing its targets and related growth drivers for the next few years, and intends to update new growth targets in the near term.

Following are the main financial results of the Group’s operating segments

For more details regarding the changes in the financial results, see the Report of the Board of Directors on the State of the Corporation's Affairs and the Analyst Presentation

Insurance Activities

P&C

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 251 million, compared to a comprehensive income of NIS 76 million before tax in the corresponding period last year. Most of the increase stems from an improvement in underwriting income in the motor property insurance subsegment and other property subsegments, offset by a decrease in profitability in other liability subsegments and in the compulsory motor insurance subsegment and from an improvement in investment income.

Health

Despite stability in the underwriting income, comprehensive loss before tax for the fourth quarter of 2024 amounted to NIS 62 million, compared to comprehensive income of NIS 150 million before tax in the corresponding period last year. The decrease was due to the interest rate effect on the LAT reserves as a result of a decrease in the illiquidity premium compared to the corresponding period.

Life and Savings

Comprehensive income before tax for the fourth quarter of 2024 amounted to NIS 83 million, compared to comprehensive loss of NIS 77 million before tax in the corresponding period last year, despite the growth in the underwriting income and lower decrease in investment income compared to the corresponding period last year, due to the negative effect on the change in the interest rate curve and illiquidity premium.

It is noted that as of shortly before the report publication date, receivable variable management fees amount to approximately NIS 302 million.

Other equity returns

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 141 million, compared to comprehensive loss of NIS 183 million before tax in the corresponding period last year. The increase arises mainly from conditions in financial markets in Israel and globally compared with the corresponding period last year.

Asset Management and Credit

Retirement (Pension and Provident)

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 31 million, compared to comprehensive income of NIS 20 million before tax in the corresponding period last year.

Investment House and Wealth

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 72 million, compared to comprehensive income of NIS 51 million before tax in the corresponding period last year.

Distribution (Agencies)

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 72 million, compared to comprehensive income of NIS 73 million before tax in the corresponding period last year.

Credit (Phoenix Gama)

Comprehensive income before tax for the first quarter of 2024 amounted to NIS 31 million, compared to comprehensive income of NIS 28 million before tax in the corresponding period last year.

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Conference Call Information

Phoenix Holdings will hold a conference call on Wednesday, May 29, 2024 at 12pm local time in Hebrew and at 5pm local time / 3pmUK / 10am EDT in English, and has published dial-in details and the presentation through the Tel Aviv Stock Exchange website.

About Phoenix Holdings

Phoenix Holdings is a leading Israel-based financial, insurance, and investment group traded on the Tel Aviv Stock Exchange (TASE: PHOE). Group activities include multi-line insurance, asset management, credit, and financial product distribution, and have demonstrated strong growth and performance across the cycle. The Phoenix serves a significant portion of Israeli households with a broad set of activities and solutions across businesses and client segments. Managing over $120 billion in assets, the Phoenix accesses Israel’s vibrant and innovative economic activity through a robust investment portfolio, creating value for both clients and shareholders.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240529899763/en/

For further information, please contact:

David Alexander
Phoenix Holdings, Deputy CEO
Email: davidal@fnx.co.il
Tel: +972 (3) 733-2979

Robert Brinberg
Rose & Company
Email: phoenix@roseandco.com
Tel: +1 (212) 517-0810

Source: Phoenix Holdings Ltd.