Momentum lifts its earnings by 13%
Chief executive Hillie Meyer said: “Overall, we are satisfied with the results, which are well in line with our three-year turnaround plan.
"The plan is to continue focusing on bolstering our product and distribution capabilities, as well as on enhancing our client service and value proposition.”
Most business units were able to grow earnings year-on-year, with Guardrisk, the health operations and Momentum Investments the star performers, the group said in an operational update yesterday.
The first three months have traditionally been a more volatile period for the group financially.
New business volumes were down 24percent compared with the first quarter of 2019, but new business volumes in the comparative period included a once-off R5billion-with-profit annuity transaction at Momentum Corporate.
If Momentum Corporate’s new business volumes were excluded, new business volumes were up 12percent across the other business units.
“We believe that the 12percent growth rate is indicative of the progress we are making in the various retail segments,” Meyer said.
Group embedded value per share was R27.90 on September 30, with the annualised return on embedded value at 11.6percent for the quarter.
The share price traded 1.16 percent lower at R21.39 yesterday morning, before closing at R21.41.
The stake in the Nigeria business was sold.
Diluted normalised headline earnings increased 9 percent to R0.9bn for the first quarter.
The contribution from operating divisions, before investment returns on the shareholder investment portfolio, investment into new initiatives and before unallocated head office expenses, increased by 16percent.
Investment returns on the shareholder investment portfolio were in line with expectations but lower than the first quarter of 2019, as the revaluations of venture capital investments was not repeated.
Momentum Investments reported 20percent new business growth, mainly from offshore wealth products and from life annuities.
Positive new inflows on to Momentum Wealth’s offshore platform were partly offset by lower asset-based fee income from investment management businesses in weaker market conditions.
Momentum Life delivered growth in long-term savings products, offset by lower protection new business.
The present value of new business premiums at Metropolitan remained largely flat, but productivity was up, which had a positive impact on profitability.
Momentum Metropolitan Africa improved its present value of new business premiums by 9percent.
Health membership numbers increased 3percent year-on-year.
Guardrisk reported double digit new business growth with strong contributions from the mining rehabilitation and underwriting managers divisions.
The India joint venture with Aditya Birla continued to deliver in line with expectations.
aYo, the joint venture with MTN, reached its 5million enrolment mark in October 2019.