The FTSE 100 insurer and popular high-yield punt announced first-half operating profit down 10% to 935 million pounds. Reasons cited for the setback included adverse exchange-rate movements, claims relating to bad weather, a disposal, and higher restructuring costs.
Aviva's figures were also blighted by an 876 million pound goodwill write-off relating to the group's U.S. operations.
However, the dividend was sustained at 10 pence per share.
Within the statement, Aviva revealed that its general-insurance profit had improved 1% to 461 million pounds, life-assurance profit had fallen 7% to 1 billion pounds, and fund-management profit had dropped 10% to 38 million pounds. It also confirmed that a "strategic plan" announced in July had remained on track and reminded investors of "a new economic capital level of 160% - 170% of required capital."
Aviva declared a net asset value of 395 pence per share on a standard IFRS basis, as well as 421 pence per share based on a special industry measure called "market consistent embedded value."
John McFarlane, Aviva's chairman, said: "While this has been a challenging first half, we are taking the necessary actions to improve our position going forward. This environment is likely to continue and therefore we expect second-half performance trends to be broadly similar to the first six months, but with higher restructuring costs as we implement our strategic plan."
Despite a recent rally, which has seen the price gain 20% from its summer low, Aviva's shares still look inexpensive on three basic valuation measures.
Doubling up the group's first-half underlying result gives possible full-year earnings of 46 pence per share, which would support a P/E of seven. Furthermore, depending on which net asset value figure you believe, the 320 pence shares may represent either 81% or 76% of the insurer's balance sheet. And assuming the second-half dividend follows the first-half trend and is maintained as well, a 2012 payout of 26 pence per share would provide an 8% income.
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