Once-off costs drive Sanlam’s interim earnings down
The financial services firm recognised an expense of R1.7bn after issuing shares to a new B-BBEE entity
Sanlam says half-year earnings fell by up to 35% partly because of once-off charges linked to its broad-based black economic empowerment (B-BBEE) scheme.
The financial services firm recognised an expense of R1.7bn after issuing shares to a new B-BBEE entity — a move it says will "position Sanlam as the foremost empowered insurance and investment management group in SA".
The group said earnings in the six months to end-June were also dented by certain fund transfers and an additional amortisation charge of about R200m linked to the consolidation of Saham Finances and Nucleus as group subsidiaries.
As a result, headline earnings in the interim period fell between 25% and 35%.
But shares in the financial services firm rose 1% to R70.58 at one point on Friday morning after it said underlying earnings rose thanks to "satisfactory growth in net result from financial services as well as investment return earned on its capital portfolios".
Excluding the one-off charge, the amortisation of intangible assets and the fund transfers, headline earnings would have increased between 8% and 18%, Sanlam said.
This reflected "the solid underlying operational performance by the group".
Sanlam said it would publish its interim results on September 5.