Investing.com -- Ashmore Group (LON:ASHM) on Friday reported a 33% decline in half-yearly profit, as the specialist emerging markets asset manager faced the impact of lower average assets under management (AuM) and volatile market conditions.
The company’s profit before tax for the six months ended December 31, 2024, fell to £49.9 million, down from £74.5 million in the same period the previous year.
Despite this decline, Ashmore’s assets under management remained relatively stable at $48.8 billion, boosted by positive investment performance of $0.6 billion.
The company also reported an improvement in net outflows, which reduced to $1.1 billion compared to $4.5 billion in the previous year’s period.
This shift was driven by higher subscription levels and a reduction in redemptions, reflecting an improved sentiment towards emerging markets.
Revenue took a hit from the lower AuM, with adjusted net revenue falling 14% year-on-year to £79.9 million.
Net management fees dropped by 17% to £68.3 million. However, performance fees of £7.9 million remained steady compared to the prior year.
The decline in revenue was partially offset by a 9% reduction in operating costs, reflecting continued cost control measures.
The company maintained an adjusted EBITDA margin of 42%, though this was lower than the 46% recorded a year earlier.
Ashmore’s bottom line was also affected by a lower level of mark-to-market gains on its seed capital investments, reflecting the more volatile market environment during the period.
On a per-share basis, diluted earnings came in at 5.4 pence, with adjusted diluted EPS at 4.8 pence, marking a 17% drop year-on-year.
Despite the decline in profitability, the board declared an unchanged interim dividend of 4.8 pence per share.
The company maintained that emerging markets continue to offer strong diversification and growth potential, with around 60% of its AuM outperforming over three and five years.
While the first quarter saw strong market performance, gains were largely reversed in the second quarter due to renewed dollar strength, US election-related volatility, and global interest rate concerns.
Ashmore remains focused on its long-term strategy of diversifying its business, with a 4% increase in equities AuM to $7 billion and continued capital raising in alternatives, including a first close of its debt infrastructure fund, which secured over $300 million. Its local investment platforms also saw growth, with notable increases in client flows in India and Colombia.
The company cited strong fundamentals, resilience, and ongoing reforms in describing the macroeconomic outlook for emerging markets.
To take advantage of potential asset price appreciation, however, a rebalancing is required to counter investors’ historically low exposure to emerging markets.