Old Mutual's share price surges 6% after strong earnings report
Financial Services
Workers clean windows outside the Cape Town headquarters of financial services company Old Mutual. The company has forecast a 6% to 26% increase in its results from operations for the 6 months to June 30, 2025.
Image: File
Old Mutual’s share price shot up over 6% to R14.45 on Tuesday morning after earnings in the six months to June 30 benefited from “exceptional growth” in its short-term insurance business and the impact of favourable financial markets, the life assurer and financial services group said in a trading statement on Tuesday.
Also impacting the result was a once-off adverse mortality experience in the Personal Finance operation in the prior period, along with an impairment of a secured loan in the group’s Mass and Foundation Cluster. The share was trading 13% above the price a year ago.
Adjusted headline earnings per share were expected to increase by between 21% and 41%, reaching between 88.9 cents and 103.6 cents in the full half year results, when they were released on September 10.
Results from operations, the primary measure of the operating business performance of the group’s various segments, were expected to increase by between 6% and 26%, reaching between R4.5bn and R5.35bn.
Partially offsetting the earnings growth over the period was a persistency basis change in the Mass and Foundation Cluster and higher central costs, which included a once-off restructuring provision incurred to reduce future spending.
The South African and Malawian equity markets, which performed considerably above expected returns, also bolstered shareholder investment returns. Profits from the Zimbabwe business continue to be excluded from adjusted headline earnings due to restrictions on accessing capital by way of dividends.
A reduction in profit and headline earnings was mainly driven by an approximate R2.2bn decrease in the Zimbabwe profits, as a change in functional currency was made from Zimbabwe Gold to the US dollar. This resulted in lower IFRS earnings for the group, but had a limited impact on net asset value due to the lower currency valuation losses reflected in equity. IFRS attributable profit after tax was expected to decline by between 31% and 21%, reaching between R3.62bn and R4.61bn.
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