Old Mutual’s First-Half Profit Surges 38% on Improved South African Outlook
Old Mutual, the South African insurance giant, reported a robust 38% increase in first-half profits on Thursday, fueled by a resurgence of investor confidence in its home market. The positive results were attributed to a combination of factors, including the outcome of the recent general elections and expectations of an easing monetary policy.
Headline earnings per share (HEPS), a key profitability metric in South Africa, surged to 133.6 cents in the six months ending June 30th, up from 96.8 cents during the same period last year. Adjusted HEPS, which excludes certain one-time items, also showed solid growth, climbing 7%.
“The post-election environment and the anticipation of interest rate cuts have significantly improved investor sentiment, boosting growth prospects in South Africa,” the company stated.
Old Mutual’s shares responded positively to the strong earnings report, climbing 1.8% in early trading.
Despite a 3% decline in operating profits, primarily due to investments in new growth initiatives, the company witnessed positive trends across key business segments. Life insurance sales grew by 6% to reach 6.6 billion rand, while gross written premiums saw a healthy 9% increase.
Gross inflows surged by 7%, reaching 101 billion rand, reflecting strong performance in the Wealth Management division. Net client cash flow also improved significantly, surging 56% to 3.2 billion rand. The company attributed this positive turnaround to robust inflows and a more stable investment landscape compared to the prior year.
Demonstrating confidence in its future prospects, Old Mutual declared an interim dividend of 34 cents per share, a notable increase from the 32 cents paid out in the same period last year.
This strong performance from Old Mutual, a leading insurer with operations spanning 14 countries across Africa and China, suggests growing optimism about South Africa’s economic trajectory. The company’s results are likely to bolster investor confidence in the region and signal a potential turning point for the South African economy.
Share this content:
Post Comment
You must be logged in to post a comment.