TIDMOMU
RNS Number : 8945J
Old Mutual Limited
22 August 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 34/19
22 August 2019
TRADING STATEMENT AND PERFORMANCE UPDATE FOR THE 6 MONTHS ENDED
30 JUNE 2019
Financial performance
Shareholders are advised that Old Mutual Limited is currently in
the process of finalising its interim results for the six months
ended 30 June 2019 ("current period"). This trading statement
provides an indication of a range for Headline Earnings per
ordinary share (HEPS) and earnings attributable to equity holders
of the Group per ordinary share (EPS) in terms of paragraph 3.4(b)
of the JSE Limited Listings Requirements compared to the six months
ended 2018 ("comparative period"). The Group's interim results will
be released on the Stock Exchange News Service of the JSE Limited
on Monday, 2 September 2019.
Results from Operations (RFO) is expected to be between a
decrease by 1% and an increase of 4% compared to the comparative
period. Adjusted Headline Earnings (AHE) is expected to increase by
approximately 6% to 12% mainly driven by higher shareholder
investment return in South Africa. Accordingly AHE per share is
expected to increase by approximately 7% to 13% to 106 -111 cents
in the current period compared to 98.9 cents for the comparative
period.
Key Performance Indicators Estimated 30 June 2018(1) Estimated
(KPIs) 30 June 2019 % change
RFO (Rm) 4,377 - 4,602 4,426 (1%) to 4%
-------------- ---------------- -----------
AHE (Rm) 5,054 - 5,315 4,750 6% to 12%
-------------- ---------------- -----------
AHEPS (cents)(2) 106 - 111.4 98.9 7% to 13%
-------------- ---------------- -----------
(1) Restated to exclude the results of Zimbabwe.
(2) AHEPS defined as Adjusted Headline Earnings divided by WANS
adjusted to reflect the Group's BBE shares and shares held in
policyholder and consolidated investment funds.
IFRS profits in the 2018 financial year include the accounting
impacts of the transactions executed to complete the Managed
Separation. These transactions included the distribution of Quilter
plc and the unbundling of Nedbank. Profit after tax for the
comparative period therefore included the consolidated profits in
respect of the Quilter plc and Nedbank businesses, these were
classified as profit from discontinued operations. Profits for the
comparative period also included the profit recognised on the
distribution of Quilter plc on 24 June 2018. Profit after tax for
the current period no longer includes the impact of these items
related to the execution of Managed Separation, which is the main
driver of the expected decrease. IFRS profit after tax attributable
to equity holders of the parent on a comparable basis is expected
to increase by approximately 8% to 13%.
The table below sets out the impact of the Managed Separation
transactions included in profit after tax attributable to equity
holders of the parent for the comparative period:
R million 30 June 2018(1)
Profit from discontinued operations
- Quilter 1,275
----------------
Profit from discontinued operations
- Nedbank 4,133
----------------
Profit on Quilter distribution 4,023
----------------
(1) The profit in respect of the distribution of Quilter plc was
restated to correct the allocation of foreign exchange differences
recycled to profit. Further the consolidated profits in respect of
Nedbank and Quilter plc were restated to reverse the amortisation
reported as part of these results as required under IFRS 5
"Non-current assets held for sale and discontinued operations". The
IFRS profits reported for December 2018 corrected for these items,
therefore will not be restated. The condensed consolidated
financial statements for the six months ended 30 June 2019 will
include further detail and disclosure on these restatements.
Accordingly we expect Basic earnings per share to decrease by
approximately 53% to 55% to 123.5 - 129.8 cents compared to 277.2
cents in the comparative period. Headline Earnings (HE) is expected
to decrease by approximately 33% to 36%. We expect Headline
Earnings per share (HEPS) to decrease by approximately 31% to 35%
to 124.3 - 130.7 cents compared to 190.6 cents in the comparative
period.
Estimated 30 30 June 2018(1) Estimated % change
June 2019
IFRS profit after
tax attributable to
equity holders of
the parent (Rm) 5,642 - 5,933 12,867 (54%) to (56%)
-------------- ---------------- -------------------
Basic EPS (cents) 123.5 - 129.8 277.2 (53%) to (55%)
-------------- ---------------- -------------------
Headline Earnings
(Rm) 5,678 - 5,971 8,848 (33%) to (36%)
-------------- ---------------- -------------------
HEPS (cents) 124.3 - 130.7 190.6 (31%) to (35%)
-------------- ---------------- -------------------
(1) Restated to reflect the revised profit from discontinued
operations. The profit in respect of the distribution of Quilter
plc was restated to correct the allocation of foreign exchange
differences recycled to profit. Further the consolidated profits in
respect of Nedbank and Quilter plc were restated to reverse the
amortisation reported as part of these results as required under
IFRS 5 "Non-current assets held for sale and discontinued
operations". The IFRS profits reported for December 2018 corrected
for these items, therefore will not be restated. The condensed
consolidated financial statements for the six months ended 30 June
2019 will include further detail and disclosure on these
restatements.
Treatment of Zimbabwe
During the first half of 2019, the Group concluded that Zimbabwe
was a hyperinflationary economy and made a decision to account for
it as such. This decision was supported by a rapid increase in the
inflation rate, which at the end of June 2019 was far in excess of
100% at 176%, the significant deterioration in the traded interbank
RTGS dollar exchange rate over the period and the lack of access in
Zimbabwe to foreign currency to pay foreign denominated
liabilities.
We have applied hyperinflation accounting from 1 October 2018
and used the Zimbabwe Consumer Price Index (CPI) to inflation
adjust reported numbers. The results, net assets and cash flows are
then translated into rand at the closing rate of 1 RTGS to 2.13
ZAR. The closing rate used to translate the December 2018 results
was 1 RTGS to 4.35 ZAR.
Until such time as we are able to access capital by way of
dividends from our business in Zimbabwe, we will manage it on a
ring fenced basis. Consequently, the results of this business have
been removed from RFO and AHE. The ability to access capital is
exacerbated by the volatility that hyperinflationary economy and
the reporting thereof introduces. This adjustment has been applied
from 1 January 2019 and we have restated comparatives to reflect
this decision.
The financial information in this trading statement is the
responsibility of the 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
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.
This information is provided by RNS, 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.
END
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