TIDMOMU
RNS Number : 7691C
Old Mutual Limited
23 June 2021
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
LSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or "Company" or "Group")
Ref 15/21
23 June 2021
OLD MUTUAL VOLUNTARY OPERATING UPDATE FOR THE PERIODED 31 MAY
2021
The global economy continues to slowly recover and vaccination
rates are progressing well in many of the advanced economies. The
rebound in global economic activity has positively impacted SA
equity market levels through strong commodity prices as demand
picks up which has contributed to the strengthening of the rand.
The pace of economic recovery in South Africa could be delayed
given the energy supply shortfall, the slow vaccination drive and
high third wave infections.
Vaccination rollouts across Africa have been slow and according
to Bloomberg data, only eight countries have vaccinated more than
5% of their populations to date. COVID-19 infection rates are
rising as the third wave continues to gain momentum in South
Africa. The country has enforced adjusted level 3 lockdown
restrictions in an effort to curb the spread of the virus. Uganda
and Namibia have also re-imposed strict lockdown measures to curb
the surge in COVID-19 cases.
Productivity levels in our South African retail segments, Mass
and Foundation Cluster and Personal Finance have improved. Issued
sales in Personal Finance improved materially in May to above the
prior year and 2019 levels. The improvement was on both single and
recurring premiums which will be reflected as reported life sales
for the first half of 2021. Issued sales in Mass and Foundation
Cluster were above the prior year due to the significant impact
that the lockdown had on issued sales in 2020 but are still below
2019 levels due to the tough economic environment. Sales remain
subdued and market conditions remain challenging in Old Mutual
Corporate with SuperFund quote activity improving by 44% relative
to 2020 but still 20% lower than 2019.
Financial performance for the period ended 31 May 2021
The table below sets out certain key performance indicators for
the period ended 31 May 2021.
Key Performance Indicators 31 May 2021 31 May 2020 % change
(R millions unless otherwise
indicated)
Results from Operations 2 680 1 768 52%
------------ ------------ -------------
Life APE Sales 4 293 4 069 6%
------------ ------------ -------------
Greater than
VNB 531 36 100%
------------ ------------ -------------
Gross Flows 80 413 77 985 3%
------------ ------------ -------------
Greater than
Net Client Cash Flow (Rbn) (0,5) 5,2 (100%)
------------ ------------ -------------
Funds Under Management(1) (FUM)
(Rbn) 1 164,1 1 104,6 5%
------------ ------------ -------------
Loans and Advances(1) 18 750 20 320 (8%)
------------ ------------ -------------
Gross Written Premiums 8 437 7 984 6%
------------ ------------ -------------
(1) Comparative amounts represent FY2020 balance sheet
amounts.
Profitability for the year to date has improved compared to the
same period in the prior year as a result of higher asset based
fees due to an increase of 13% in average FUM, closing FUM at the
end of May was 17% above May 2020 levels. Improved credit
experience due to a deliberate focus on tightening of credit
criteria and more selective offers to customers in Old Mutual
Finance in South Africa, the non-repeat of the negative mark to
market losses in Old Mutual Investments and significant level of
COVID-19 business interruption and rescue claims in Old Mutual
Insure in the prior year positively impacted profits for year to
date . We remain on track to deliver our cost-savings target of
R750 million at the end of 2022.
Life APE sales are 6% ahead of the prior year due to the
positive recovery of productivity levels as observed in issued
sales volumes. Personal Finance delivered significant growth in
single-premium annuity sales which were above 2019 levels and
strong risk sales. Our Wealth Management business delivered
significant fixed bond sales and h igher risk sales were recorded
in China. These were partially offset by lower umbrella and risk
sales in Old Mutual Corporate despite the improvement in quote
activity relative to the levels at the end of 2020. The significant
growth in VNB was largely driven by increased sales volumes of high
margin products coupled with lower initial expenses and better
channel losses, with a VNB margin of 2.1% being well within our
medium-term target range of 1.5% - 3.0%.
Gross flows increased when compared to the same period in the
prior year as a result of sales on the retail platform of our
Wealth Management business and strong inflows in our Liability
Driven Investment (LDI) capability and Marriott in Old Mutual
Investments coupled with strong single premiums annuity sales from
Personal Finance. These were partially offset by a non-repeat of
significant inflows into our Asset Management businesses in East
Africa and Southern Africa.
Negative NCCF was largely due to significant volumes of
mortality claims in our South African life businesses for year to
date. Lower inflows in Rest of Africa, higher terminations and
benefits payout in Old Mutual Corporate as well as an increase in
annuity payments and disinvestments in Personal Finance contributed
to the increased outflows. These were partially offset by strong
inflows in Old Mutual Investments. FUM increased largely due to
strong equity markets, despite negative NCCF.
The decrease in Loans and Advances continue to be a function of
a decline in disbursements due to footfall in retail branches in
South Africa and Rest of Africa, which has not yet fully recovered
to pre-COVID-19 levels, and the further tightening of credit
criteria in Old Mutual Finance as we manage our risk appetite in
the current environment. Good customer retention and pleasing
acquisition rates in Rest of Africa as well as growth across most
lines in Old Mutual Insure has driven the increase in Gross Written
Premiums compared to the prior year.
Operating update
We continue to closely monitor the impact of COVID-19 on our
claims experience. Our claims experience is in line with expected
claims levels assumed in the December 2020 pandemic reserve, set up
for the anticipated impacts of COVID-19 in 2021. At this stage, it
is too early to determine whether additional provisions will be
required at the end of H1 2021. The reserve will be assessed at 30
June 2021, taking into account the possibility of further waves and
other developments relating to the pandemic.
Investor engagement
As previously communicated in the Q1 2021 operating update, we
will be hosting a Capital Markets Day on Thursday, 24 June 2021
from 13:00 - 17:00 CAT. The agenda will focus on the Group's
strategy, capital position relative to targets and other relevant
business updates. Investors and Media are invited to attend and
register on the following link:
http://www.overendstudio.co.za/events/OldMutual/2021/CapitalMarketsDay/rsvp.php
The financial information in this voluntary operating update is
the responsibility of the Old Mutual Board of Directors and has not
been reviewed or reported on by the Group's external auditors.
Sandton
Sponsors
JSE Merrill Lynch South Africa (Pty) Limited
t/a BofA Securities
Namibia PSG Wealth Management (Namibia) (Proprietary)
Limited
Zimbabwe Imara Capital Zimbabwe plc
Malawi Stockbrokers Malawi Limited
Enquiries
Investor Relations
Sizwe Ndlovu T: +27 (0)11 217 1163
Head of Investor Relations M: +27 (83) 500 8019
E: tndlovu6@oldmutual.com
Communications
Tabby Tsengiwe T: +27 (11) 217 1953
General Manager of Public M: +27 (0)60 547 4947
Affairs and Communications E: ttsengiwe@oldmutual.com
Notes to Editors
About Old Mutual Limited
Old Mutual is a premium African financial services group that
offers a broad spectrum of financial solutions to retail and
corporate customers across key market segments in 14 countries. Old
Mutual's primary operations are in South Africa and the Rest of
Africa and it has a niche business in Asia. With over 176 years of
heritage across sub-Saharan Africa, Old Mutual is a crucial part of
the communities they serve and the broader society on the
continent.
For further information on Old Mutual and its underlying
businesses, please visit the corporate website at www.oldmutual.com
.
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDFTMMTMTBTTPB
(END) Dow Jones Newswires
June 23, 2021 02:00 ET (06:00 GMT)
Old Mutual (LSE:OMU)
Historical Stock Chart
From Jun 2024 to Jul 2024
Old Mutual (LSE:OMU)
Historical Stock Chart
From Jul 2023 to Jul 2024