Sanlam FY earnings fall 19%, in line with expectations
JOHANNESBURG - South Africa’s biggest insurer Sanlam said on Thursday its annual profit fell 19 percent, coming in the middle of a range it flagged last week, as it recorded a number of one-time charges.
The company had warned its headline earnings would drop by between 15 percent and 25 percent, dragged down by a 1.7 billion rand ($103.80 million) expense related to a black economic empowerment transaction and a range of other charges.
Its headline earnings per share - the main profit measure in South Africa - fell to 357.9 cents ($0.2186) in the year to Dec. 31, from 441.1 cents a year earlier, as higher claims across its newer markets also dented its bottom line.
Sanlam, however, said its underlying operational performance was “solid”, especially in a difficult economy and volatile global markets.
“Our diversification across geographies, market segments and lines of business ... helped us navigate these challenges to continue to deliver strategic value to shareholders,” it said.
Its net operational earnings - a new performance measure it introduced in the results, expanding on its previous measure of operating profit - grew by 14 percent.
The company, on a drive to expand across the African continent, said the unit housing the businesses in its newer markets was the biggest earnings driver, with a 29 percent jump in profit.
That unit includes SAHAM Finances, Sanlam’s newly acquired Moroccan business. Sanlam bought the business, which operates in 26 countries via 65 subsidiaries across the continent, for $1 billion in March 2018 - the 101-year-old company’s largest-ever purchase.Reuters