Aug. 15 (Bloomberg) -- AWD Holding AG, a German financial services broker, said second-quarter profit fell 8.3 percent as it sold fewer life insurance policies and spent money on marketing during the soccer World Cup.

Net income fell to 11 million euros ($14 million) from 12 million euros a year earlier, the Hanover-based company said in an e-mailed statement today. Analysts forecast a profit of 11.3 million euros, the median of eight estimates in a Bloomberg News survey showed.

AWD is shifting from sales of traditional life insurance to products that carry lower commissions, such as government- subsidized Riester pensions or mutual funds, after a cut in tax subsidies hurt sales of life policies in Germany. Larger rival MLP last week cut its 2006 profit forecast by 25 percent, citing ``restrained'' demand for pension products.

AWD is sticking to a forecast for ``double-digit'' sales growth and ``clearly'' faster operating profit growth, Chief Executive Officer Carsten Maschmeyer told journalists at a press conference in Frankfurt today.

AWD shares slipped 27 cents, or 1 percent, to 27 euros by 11:12 a.m. in Frankfurt. The stock has advanced 15 percent this year, valuing the company at 1.04 billion euros.

Sales increased 17 percent to 174.1 million euros in the quarter, and operating profit, defined as earnings before interest and taxes, rose 1.8 percent to 16.9 million euros, the broker said.

World Cup Advertising

Life insurance sales accounted for 18 percent of revenue, down from 23 percent a year ago. The share of fund-linked products, which usually carry lower provisions, rose to 37 percent from 32 percent and revenue from selling mutual funds rose to 23 percent of sales from 12 percent, AWD said.

Sales and marketing costs increased 37 percent to 32.3 million euros in the quarter as the company spent more on advertising linked to the World Cup soccer tournament in Germany in June and July.

AWD isn't planning to buy back any of its shares, Maschmeyer said, adding that it is also too early to predict what dividend the management board may recommend for 2006.

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To contact the reporter on this story:
Oliver Suess in Munich at  osuess@bloomberg.net

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