Liberty Holdings takes a hit of R2.17bn

By Sandile Mchunu Time of article published Aug 5, 2020

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DURBAN - Liberty Holdings swung into a loss of R2.17 billion in the six months to end June after the financial services group set aside a R3bn pandemic reserve fund to deal with the Covid-19 outbreak in its operations.

In last year’s results, the group reported normalised headline earnings of R2.01bn.

Liberty said the reserve has been calculated to estimate the future effects of the pandemic by estimating excess mortality, excess withdrawals and policy lapses and expenditure directly attributable to the Covid-19 pandemic.

During the period the group increased payments made to death and disability by 5.1 percent to R5.3bn during the period while annuity payments increased by 6.1 percent to R4.1bn.

“Death claims related to the Covid-19 pandemic have been low to date however are starting to increase, mostly within the funeral books in the SA Retail and Liberty Corporate businesses,” the group said.

South Africa has recorded 8 884 deaths as at the end of Tuesday as a result of the pandemic.

In the results, its profits declined by more than 100 percent to a loss of R4.07bn before tax compared to a profit before tax of R3.73bn reported last year.

The group also reported normalised headline loss of 802.5 cents a share compared to last year’s normalised headline earnings a share of 735.8c while basic loss a share came in at 902.4c compared to last year’s basic earnings a share of 699.9c.

The group did not declare an interim dividend in the light of the outbreak.

The group said the world is facing a significant humanitarian crisis, with the virus continuing to spread exponentially across the globe and in South Africa.

However, the group said its operations remain financially sound and well capitalised, remaining towards the upper end of the capital coverage target range of 1.5 to 2 times after taking into account the operational and financial market impacts of the pandemic and the establishment of the pandemic reserve.

Liberty Holdings share price was up by 1.04 percent to R67.80 on the JSE.


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