DURBAN - Sanlam's share price declined by more than 5percent on the JSE on Friday morning, after the financial services group flagged a fall in earnings for the year to end December, impacted by a once-off expense of R1.7billion related to its broad-based black economic empowerment scheme (B-BBEE).
As a result, Sanlam said it expected its headline earnings per share (Heps) to decline by between 15percent and 25percent to between 334.2cents a share and 378.8c, down from last year’s Heps of 445.6c.
The share price closed 3.86percent lower at R64.22 on the JSE on Friday.
The group said its earnings were also likely to take a knock on an
additional amortisation charge of about R250million on the business acquired in 2018, as well as a net loss of R868m on the consolidation of the Sanlam Foundation, and the B-BBEE entity.
Its diluted Heps was also expected to decline by between 15percent and 25percent to between 330.8c and 374.9c, down from 441.1c last year.
Sanlam said earnings attributable to equity holders were further impacted by the profit on deemed disposal of Saham and Nucleus of R2.8bn in 2018.
“These were one-off earnings that increased the comparative base, contributing to an expected decrease in earnings attributable to equity holders of between 35percent and 45percent compared to 2018,” the group said.
Its earnings per share (Eps) are expected to decline by between 35percent and 45percent to between 311c and 367.5c, down from last year’s 565.4c, while diluted Eps was also expected to decline by 35percent and 45percent to between 307.8c and 363.8c, down from 559.7c reported a year earlier.
The group said excluding the once-off IFRS 2 charge, the additional amortisation of intangible assets, the fund transfers and the profit on disposal of Saham and Nucleus, headline earnings and earnings attributable to equity holders of the group would have increased by between 10percent and 20percent.
But Sanlam said it had achieved satisfactory growth in net results from financial services, as well as the investment return earned on its capital portfolios during the year, contributing to an estimated combined growth of between 8percent and 18percent from these sources of earnings.
Sanlam expects to release its annual results on Thursday.