Munich Re posted a higher-than-expected 63 percent decline in third-quarter profit as currency effects weighed on earnings.
Net income dropped to 286 million euros ($393 million), the Munich-based reinsurer said in a statement reported by Business Week Tuesday, missing the 516.3 million-euro average estimate of seven analysts surveyed by Bloomberg. The company posted currency losses of 342 million euros as the dollar strengthened against the euro, while writedowns on Greek government bonds totaled 45 million euros.
“Munich Re released a weaker-than-expected set of quarterlies but reiterated its wobbly guidance,” Christian Muschick, a Frankfurt-based analyst with Silvia Quandt Research said in an e-mail note to clients, as reported by Business Week.
The currency-translation losses were mainly caused by “inconsistencies between economic asset liability matching and International Financial Reporting Standard rules, which don’t allow for discounting of liabilities,” Munich Re said, as reported by Business Week.
But if the euro should rebound against the dollar in the current quarter, Munich Re is likely to post gains, Chief Financial Officer Joerg Schneider said on a conference call to Business Week Tuesday.
