1st Sep 2020 06:59
(Alliance News) - Old Mutual Ltd on Tuesday said it swung to a loss in the first half of 2020 after a swing to a negative non-banking investment return and has withdrawn its guidance on medium-term targets.
The Anglo-South African financial services firm reported a ZAR6.58 billion pretax loss for the six months ended June 30, swinging from a ZAR7.23 billion profit the year before.
This resulted in large part from a swing to a loss on non-banking investment return of ZAR785 million from a ZAR57.07 billion profit the year before.
This meant that even though net earned premiums were higher at ZAR35.33 billion compared to ZAR34.80 billion the year before, total revenue and other income more than halved to ZAR43.11 billion from ZAR100.22 billion.
The company declared no dividend per share for the period, having paid out 45 rand cents per share the year before.
Old Mutual has withdrawn its guidance for medium-term targets and plans to put new targets in place.
"The increased level of forecast risk and observed variability in possible recovery scenarios has made it increasingly difficult to provide guidance around and achieve our previously disclosed medium term targets. In light of this, we are withdrawing our guidance in respect of these medium term targets and replacing them with new targets more appropriate for measuring our progress as we transition the business out of the crisis," the company explained.
"These targets will be reviewed and supplemented or enhanced as we have more certainty on possible economic recovery scenarios. Further guidance on expected outcomes for the full year 2020 will follow once we have greater certainty on expected impacts of Covid-19 in the second half of the year. These targets focus on the maintenance of appropriate levels of liquidity and solvency and improving the efficiency of our business given the pressures on revenues that Covid-19 introduces," Old Mutual added.
By Anna Farley; [email protected]
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