Old Mutual Life posts decline in profits

OLD MUTUAL Life Assurance has reported a decline of 10.23 percent in profits after tax for the year to end December to R7.19 billion, down from the R8.01bn recorded during the corresponding period in the previous year.

The financial services group reported that its investment and securities totalled R622.58bn for the period, from R576.16bn last year, with total assets of R664.54bn, up from R631.41bn.

Total revenue increased to R121.89bn, up from R88.21bn with cash and cash equivalents of R12.38bn.

Old Mutual Life Assurance is the subsidiary of Old Mutual Emerging Markets (Omem), soon to be listed as Old Mutual Limited on the JSE after the completion of managed separation by the end of 2018.

Omem holds 100 percent of the company’s ordinary shares. The ultimate holding company is Old Mutual plc, incorporated in the UK.

The company said it had managed to ensure that it was properly capitalised and funded at all times, having regard to its regulatory needs, prudent management and the needs of all stakeholders.

The group said it had exposure to the effects of fluctuations in foreign currency exchange rates on its financial position, performance and cash flows.

The company’s business primarily involves the provision of all classes of life assurance, savings and retirement funding. It managed to pay dividends on ordinary shares amounting to R5.5bn and dividends on preference shares amounting to R1.29bn for the year, despite this decline in profits. However, Omem managed to report a 46 percent increase in profit after tax of R10.2bn for the year, largely driven by higher actual investment returns in South Africa and Zimbabwe.

Omem seeks to become a premium African financial services group that offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in 17 countries.

It primarily operates in seven segments and its lines of business include life and savings, property and casualty, asset management and banking and lending.

Old Mutual shares rose 0.35 percent on the JSE yesterday to close at R40.35.