Zimbabwe: Old Mutual Reports Earnings Growth

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14 March 2019

Old Mutual Plc posted an 8 percent growth in headline earnings for the year to December 31, 2018.

Headline earnings for the 12-month period under review rose to R14,2 billion from R13,1 billion in the prior year.

In a statement accompanying the results, group chief executive officer Peter Moyo expressed satisfaction with the group's performance.

"We continue to be a highly cash generative business with R6,6 billion of free cash generated in 2018 which has more than covered our dividends to our shareholders.

"Our group capital position remains robust with a solvency ratio of 170 percent, near the upper end of our target range," said Mr Moyo.

The CEO commended the company's ability to manouevre through a tough operating environment.

"We delivered particularly good sales and Net Client Cash Flows (NCCF) in a tough economic and competitive environment. We delivered very well against the promises we made to investors," he said.

The broad 2018 operating environment (both in Zimbabwe and beyond), according to the group was characterized by volatility in global equity, currency, and bond markets due to escalating global trade tensions.

The global dynamics in addition to local economic data negatively affected the South African economic landscape resulting in low Gross domestic product in 2018. The tough environment stifled the company's Results from Operations (RFO) growth target of GDP +2 percent.

"Sadly we did not meet our Results from Operations (RFO) growth target of GDP +2 percent. We are still confident that we will meet all our targets in the medium term," said the group CEO.

Old Mutual also announced a final dividend of 72 cents per share, bringing its total ordinary dividend per share to 117 cents a share in line with its dividend policy.

The group intends to conduct a share buy-back programme of approximately R2 billion in 2019.

Old Mutual said taking into account the planned share buy-back, the special dividends paid in October 2018 and the Nedbank unbundling, the total distribution to shareholders since listing equated to nearly R52 billion.

Going forward, Mr Moyo is optimistic of the future performance of the group.

"Global growth is still expected to continue for 2019 assuming trade tensions and equity market risks do not result in a loss of confidence. This presents the opportunity for our operations in the region to grow our consumer base and develop our product lines," said Mr Moyo.

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