Old Mutual warns of profit drop after Nedbank unbundling
Headline earnings per share could fall by a quarter due amid tough economic conditions in SA
Insurance group Old Mutual said on Thursday profits for its year to end-December could fall by a quarter, due to SA’s tough economic environment and the unbundling of its majority shareholding in Nedbank.
Headline earnings per share are expected to fall between 22% and 25% compared to the prior period’s 306.9c. Headline earnings per share is a widely used profit metric in SA and strips out one-off items, such as writedowns.
In 2018, Old Mutual reduced its interest in Nedbank and its UK wealth management business Quilter was unbundled and separately listed in London, with a secondary inward-listing on the JSE.
The group said on Thursday results from operations was expected to decrease as much as 5%, saying this was a “resilient outcome in the context of low economic growth in SA”.
Adjusted headline earnings is expected to rise by between 2% and 7%, driven by higher shareholder investment return in SA, the group said.
In morning trade on Thursday, Old Mutual was down 0.78% to R16.44, having fallen 16.38% so far in 2020.