Zim unit weighs down Old Mutual Group
BUSINESS REPORTER
Financial services group, Old Mutual PLC, says the Zimbabwe unit weighed down the group’s performance following the deterioration of Zimbabwe dollar.
The deterioration of the Zimbabwe dollar was largely due to a tight fiscal and monetary policy stance.
In its trading update to December 31, 2022, Old Mutual PLC said the Zimbabwe unit suffered a significant decline in earnings.
“The decline in Zimbabwe earnings was largely driven by the deterioration of the Zimbabwean dollar to the rand and the decrease in investment returns on equities traded on the ZSE relative to the prior year,” Old Mutual said.
The financial services group expects results from operations to be significantly above 20% compared to the prior year due to improved profits on the back of strong sales and core operational performance across the group.
“Our life profits benefitted from the refinement in hedging methodology, enabling a material release of excess discretionary margins as well as lower mortality in the current year as the effects of Covid-19 eased.
“All remaining Covid-19 provisions were released but the impact was mostly offset by the strengthening of our mortality basis to allow for endemic Covid-19 claims, and worsened persistence as the challenging economic conditions continue to impact our retail customers,” reads part of the statement.
The group said the 2021 adjusted headline earnings included the equity accounted earnings from Old Mutual’s strategic equity investment in Nedbank which was unbundled in November 2021.
The 12.2% stake in Nedbank that was distributed contributed R646m of the R5.402bn of adjusted headline earnings in the comparative period.
If the diversified group excludes the impacts of Nedbank, adjusted headline earnings are expected to be between 23% – 43% up.
Old Mutual is currently in the process of finalising its annual results for the year ending December 31, 2022.
