Main image: Old Mutual/ITNewsAfrica
Life insurance and financial services firm Old Mutual has increased its annual dividend and has also announced its intention to buy back its own shares up to R1.5 billion.
In its full-year results for the year ended December 31, 2022, the Cape Town-headquartered company said it had earmarked between R1 billion and R1.5 billion for return to shareholders as it initiated share buybacks and approval processes with the board of directors and Prudential Authority .
Media reports indicate that Old Mutual paid a final dividend of 51c per share, bringing the full dividend for the year to 76c, which, after adjusting for the Nedbank unbundling, was 13% higher than the previous year.
The group stated that adjusted total revenues increased by 34% to R6.7 billion across 14 countries.
As one of South Africa’s largest financial institutions, it said: “the group has delivered solid financial results in 2022, despite the difficult macroeconomic environment and market volatility.
“The pressure on our bottom line from the Covid-19 pandemic has eased as the ongoing impact of the pandemic is cushioned.”
Life APE (annual premium equivalent) sales grew 10% to R12.5 billion; gross premiums increased by 12% to R22.3 billion, while the group solvency ratio remained robust, up 600 basis points to 190%.
“I am very pleased with our robust operating performance with strong sales and profits,” said Iain Williamson, CEO of Old Mutual.
“We have demonstrated resilience as we continued to navigate a challenging environment and stayed true to our goal of defending a mutually positive future every day.
“We are confident that the overall health of our pipeline will support improvements in customer net cash flow. Our assets under management (FUM) of R1.2 trillion were down 4% due to weaker market performance in South Africa and globally.”
According to IOL, operating results rose to R8.7 billion and are mainly due to improved profits due to strong sales.
“Our life earnings benefited from the sophistication of the hedging methodology, which significantly freed up excess discretionary margins and reduced the current year mortality rate as the effects of Covid-19 abated,” the group announced Tuesday.
“All remaining Covid-19 provisions were released, but the impact was largely offset by the strengthening of our mortality base to accommodate endemic Covid-19 claims and deteriorating persistence as challenging economic conditions continue to impact our retail customers.”
Looking to the future, Old Mutual condemned the ongoing crisis of power as affecting economic activity in the country.
“The macroeconomic environment in our markets is expected to remain challenging and continue to increase financial pressure on our customers,” the company said.
“We remain focused on driving sales volumes and a profitable sales mix to enhance market share growth in our segments. Despite the challenging headwinds, we have progressed through our recovery phase and have largely achieved our medium-term objectives a year ahead of schedule.”