JOHANNESBURG - Sanlam said on Friday it expected a decrease of between 25 percent and 35 percent in headline earnings and earnings attributable to equity holders for the six months to June 30, compared with the first half of 2018.

The pan-African financial services group said earnings were impacted by a one-off expense of R1.7 billion in terms of International Financial Reporting Standards (IFRS 2) related to a broad-based black economic empowerment (B-BBEE) share issuance.

Sanlam said it had concluded the five percent share issuance at R70 per share to a new B-BBEE entity to position itself as the foremost-empowered insurance and investment management group in South Africa.

It said the value of business acquired intangible assets recognized in 2018 upon the first-time consolidation of Saham Finances and Nucleus as group subsidiaries, contributed an additional amortisation charge of R200 million in the first six months of 2019.

Profits and losses recognised in terms of IFRS in respect of Sanlam shares held in policyholder portfolios, the movement in deferred tax assets and the consolidation of the Sanlam Foundation and B-BBEE entity deteriorated from a R209 million net profit in 2018 to a net loss of R102 million in 2019.

The consolidated results of the B-BBEE entity included in the 2019 fund transfers comprises interest paid on the external funding and administration costs incurred of some R110 million.

Excluding the one-off IFRS 2 charge, the amortisation of intangible assets and the fund transfers, Sanlam said headline earnings and earnings would have increased by between eight percent and 18 percent, reflecting the solid underlying operational performance by the group.

- African News Agency (ANA)