Old Mutual Posts Highest Profit Since 2019 on Demand Growth
TLDR
- Old Mutual Group has reported its highest profit since 2019, driven by strong demand for its short-term insurance and wealth management products
- The Johannesburg-based company’s adjusted headline earnings rose 14% to R6.69 billion ($370 million), exceeding the R6.6 billion forecast by analysts
- Headline earnings per share increased by 17%, boosted by Old Mutual’s R1 billion share repurchase program in 2024
Old Mutual Group has reported its highest profit since 2019, driven by strong demand for its short-term insurance and wealth management products in South Africa. The Johannesburg-based company’s adjusted headline earnings rose 14% to R6.69 billion ($370 million), exceeding the R6.6 billion forecast by analysts.
The company, along with rivals like Sanlam, is benefiting from a modest economic recovery in South Africa, bolstered by improved performance at the state-run power utility and government-backed infrastructure projects, which are spurring consumer demand.
Headline earnings per share increased by 17%, boosted by Old Mutual’s R1 billion share repurchase program in 2024, which helped reduce the weighted average number of shares. The company also proposed a final dividend of 52 cents per share, bringing the total payout to 86 cents per share, slightly below the consensus estimate of 89 cents.
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Points clés à retenir
Old Mutual’s strong performance reflects a steady recovery in South Africa’s economy, benefiting from a growing demand for financial services amid government infrastructure initiatives. The company’s successful share buyback program also helped boost earnings per share. As it diversifies into banking with OM Bank, the challenge will be managing competition in the crowded market, particularly as the new bank targets affluent customers. The firm’s strategy suggests confidence in South Africa’s long-term growth potential, though competition from established players will remain a significant hurdle.
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