Steinhoff saga’s effect on Sanlam earnings not expected to be ‘significant’
Sanlam says the drag on its investment returns will be limited to R175m after tax, thanks to equity hedges
On Thursday, Sanlam said it did not expect its exposure to Steinhoff to weigh significantly on earnings.Shares in Steinhoff have plunged more than 90% in December after former CEO Markus Jooste resigned as the group disclosed it had discovered "accounting irregularities".Sanlam said in reference to its Steinhoff interests that "the best estimate potential impact on the group’s 2017 and future earnings is not significant".The group’s after-tax profits from financial services could be dented by up to R580m. But the financial services group said its best estimate of potential exposure "amounts to some R230m after tax on the group’s net result from financial services".Sanlam also said the drag on its investment returns would be limited to R175m after tax thanks to equity hedges.Further, nonparticipating policy holder portfolios had exposure to foreign debt instruments of R358m, with mark-to-market declines on these instruments currently at R160m. These portfolios also had exposure to So...
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