Old Mutual first-half profit falls 30% amid market volatility

Old Mutual, South Africa’s largest life insurer, reported a 30% decline in adjusted first-half earnings, falling to R2.95 billion (US$184 million) from R4.2 billion in the previous year. The company attributed the drop to market volatility driven by conflicts in the Middle East, which impacted investment returns.

Despite the decline in earnings, the group saw growth in other areas. Annual premium equivalent sales in the life insurance segment rose 21% to R7.85 billion, driven by increased risk insurance, annuity sales, and higher volumes in African operations. Operating earnings per share increased by 11% to 126.3 rand cents, supported by cost reductions and strong contributions from Old Mutual Investments.

Management expressed confidence in the group’s strategic execution. CEO Jurie Strydom noted that the company is meeting its strategic milestones, while the group reported a return on group equity value (ROGEV) of 12.7%.

In terms of shareholder returns, Old Mutual declared an 8% increase in its interim dividend to 40 rand cents per share and announced a new ZAR 1 billion share buyback programme. The company also highlighted the positive growth of its newly launched OM Bank, which reached a customer base of 742,000 and retail deposits of R1.4 billion.