Old Mutual Limited Operational Update for the 3 months ended 31.3.19 (1664A)
May 24 2019 - 8:00AM
UK Regulatory
TIDMOMU
RNS Number : 1664A
Old Mutual Limited
24 May 2019
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or "Company" or "Group")
Ref 25/19
24 May 2019
OPERATING UPDATE FOR THE 3 MONTHS ENDED 31 MARCH 2019
Operating environment
In South Africa, our largest market, the economic environment
remains challenging with low economic growth and rising fuel prices
expected to place further pressure on our customers' disposable
income levels. During the first 3 months of 2019, the JSE delivered
its best first quarter since 2007 with the ALSI rising 7.1%
reflecting the strong performance of resource and industrial
sectors. Whilst equity markets in South Africa are up from December
2018 the absolute levels are still below where they were in the
first quarter last year, placing pressure on earnings.
In Zimbabwe, the equity markets remain volatile, decreasing 17%
since the beginning of the year. Inflation reached 67% at the end
of March 2019, reflecting the increased cost of imports. Our
customers' in this market are impacted by the rising inflation and
the resultant impact thereof on their disposable income levels. On
20 February 2019 the Reserve Bank of Zimbabwe announced that RTGS
had been recognised as an official currency and established an
inter-bank foreign exchange market to allow trading between RTGS
and other currencies. At the end of March 2019, the RTGS was
trading at 3.01 to the USD dollar.
Financial performance
Despite the challenging economic environment the business
continues to attract new business from customers. Life APE sales of
R2,945 million were 4% ahead of prior year largely due to higher
recurring premium SuperFund sales in Old Mutual Corporate.
Gross flows of R39.3 billion were 10% behind prior year due to
lower flows in Wealth and Investments and lower single premium
sales in Old Mutual Corporate. NCCF in the first quarter of 2019
was negative (-R1.1 billion) mainly reflecting lower net flows in
Wealth and Investments.
Funds under Management was up from December 2018 at R1,084
billion in line with equity market returns in South Africa.
Corporate activity
The sale of our business in Latin America completed on 1 April
2019, with gross proceeds of R4.4 billion ($308 million) received.
The associated costs are expected to be approximately $40 million.
We expect to realise an IFRS profit on the disposal of this
business.
We have repurchased shares under the share repurchase programme
announced on 11 March 2019. The price at which shares were
repurchased ranged from 2,222 to 2,313 cents. The shares
repurchased will be cancelled and revert to authorised but unissued
share capital. Following the shares repurchased to date the Group
will have 4,831,264,848 ordinary shares in issue.
Outlook
Our RFO target of GDP + 2% CAGR will become increasingly
challenging to achieve over the three year target period due to
negative RFO growth in 2018. If poor economic conditions persist
during 2019 in our key markets, this will further challenge the
achievement of this target. We remain on track to deliver on our
other medium term targets.
We anticipate making a further operating update ahead of the
publication of our 2019 Interim Results announcement on 2 September
2019.
This update for the 3 months ended 31 March 2019 has not been
audited or reviewed by the Group's auditors.
Sandton
Sponsors
JSE Merrill Lynch South Africa (Pty) Limited
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 E: tndlovu6@oldmutual.com
Communications
Tabby Tsengiwe T: +27 (11) 217 1953
Head of Communications M: +27 (0)60 547 4947
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 markets 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 170 years of
heritage across sub-Saharan Africa, we are a crucial part of the
communities we serve and broader society on the continent.
For further information on Old Mutual, and its underlying
businesses, please visit the corporate website at
www.oldmutual.com.
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END
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