Momentum Metropolitan holds on to dividend after Covid-19 hit
The group does not expect to meet its earnings targets in 2021, with the pandemic weighing on the outlook for the group and SA’s economy
Insurance and financial services group Momentum Metropolitan Holdings has opted to hold on to its final dividend, with full-year profits more than halving after Covid-19 battered global markets and prompted a rise in claims provisions.
The group reported a net negative effect of R983m due to the effect of Covid-19 on claims and policy lapses in its year to end-June, when normalised headline earnings fell 51% to R1.52bn.
The partial recovery of investment markets during the three months to end-June did not fully offset the effect of severe market related losses earlier in the year, the group said, resulting in net market losses of R975m.
The group adjusts the profit measure for the effect of treasury shares — an accounting mismatch that is peculiar to financial institutions that invest in their own securities on behalf of clients.
Momentum has not paid a final dividend, having paid out 35c per share previously. The group’s total dividend for the year was 40c per share, from 70c previously.
The group said it was unlikely to meet its earnings target for 2021 of normalised headline earnings of between R3.6bn and R4bn, and the pandemic is expected to weigh on new business volumes.
“The impact of Covid-19 on SA’s fragile public finances has been devastating, with debt levels expected to rise materially.” the group said.
“We will continue to focus on matters under our control and are determined to emerge from the current difficult situation in an improved relative position — in terms of market share, operational excellence, and use of evolving technology,” the statement read.
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