Global Earnings And Company News Update

German Allianz SE gained at last from its US Pimco bond fund management arm. We bought to gain from AZSEY's recovery after bond king Bill Gross in 2014 walked away from the California sub. Pimco garnered net new assets under management for the third quarter in a row. Now Pimco is luring in money because of its good performance and has become the largest bond fund and the largest active fund in the US, according to Morningstar. It got euros 21 bn of new outside money in Q1 (about $23 bn), and another 21 bn from its own subs.

About 92% of the AUM at Pimco beat the benchmarks over the past 3 years. As I keep insisting you cannot use an index-tracking ETF in managing a bond fund, whatever the edge this gives to stock fund overheads.

AZSEY operating profit rose 9.4% to euros 2.9 bn and CFO Dieter Wemmel told the conference call that the full year operating profit target of euros 10.8 bn stands. The stock fell 0.375 in Frankfurt trading but has gained ~10% YTD.

Harry Geisel reports on Finnish Sampo insurance which reported its Q1 earnings yesterday. EPS rose modestly to 68 euro cents from 65 last year, while marking to market (revaluing marketable assets y/y) rose from 36 euro cents in 2016 to 99 euro cents this year. SAXPY also gained from a lower combined ratio of 87.4% from 89.8%, which is the combo of expenses and underwriting losses divided by premium revenue. While other insurers had poor combined ratios in the last quarter (including Berkshire Hathaway) because of bad weather and tornadoes, Sampo avoided this business by being smart or lucky. It also benefited from its largest investment in Swedish Nordea Bank, which has risen in the stock market because it may move to another jurisdiction as Stockholm tries to force it to boost its reserves.

All told, Sampo performed well in the current crummy P&C business.


Ecopetrol of Colombia net Q1 income rose 144% y/y to COP 886 bn. Its cash flow (earnings before interest, taxes, depreciation and amortization) hit COP 5.8 bn, a 2 year high and its EBITDA margin topped 43.5%. This oil company also found a new large offshore gas deposit in Colombian Caribbean waters. The numbers were solid. Its sales rose 28% to 13.371 trillion pesos ($2.886 bn) on which operating profit rose 106% to COP 3,299 trillion ($1.7 bn). Consolidated net (including the government share) hit COP 1.073 trillion or $462 mn). It also has cash on hand of COP 17.5 trillion. These outstanding results benefited from improved public order after the deal with the FARC guerillas and the opening of new refining capacity.

EC continues to control costs and its structural savings hit COP 150 bn in the quarter on the way to its full year target of COP 740 bn. Its stock is up 5.7% on the Big Board.

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