Old Mutual Limited Preliminary Operating Update (7275M)
25 January 2021 - 6:00PM
UK Regulatory
TIDMOMU
RNS Number : 7275M
Old Mutual Limited
25 January 2021
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
MSE Share Code: OMU
NSX Share Code: OMM
ZSE Share Code: OMU
("Old Mutual" or "the Company")
Ref 01/21
25 January 2021
PRELIMINARY OPERATING UPDATE FOR OLD MUTUAL LIMITED FOR THE YEAR
ENDED 31 DECEMBER 2020, INCLUDING FINALISATION OF THE BUSINESS
INTERRUPTION CLAIMS PROCESS FOR OLD MUTUAL INSURE
PRELIMINARY OPERATING UPDATE FOR OLD MUTUAL LIMITED
Operating conditions across our business have remained
challenging during the second half of 2020.
Despite the tough economic and operating environment many of our
volume related KPIs have shown recovery in the second half,
demonstrating the resilience of our franchise. Our Gross Flows for
the 12 months ended 31 December 2020 are R188 billion, 10% up on
the prior year. Positive NCCF of R10,1 billion is R7,0 billion
higher than the prior year, driven by strong investment flows
across the Group in the second half of the period, which were
partially offset by higher outflows in Old Mutual Corporate as a
result of the deteriorating economic environment. We have also seen
continued improvement in adviser productivity with sales trending
towards historic levels.
Whilst there are encouraging signs of recovery in our sales
metrics, we are concerned about the rapidly increasing rate of
COVID-19 infections in our key geographies and the impact that the
pandemic could have on our customers, economic recovery, and
mortality rates. We are currently in the process of finalising our
life reserves, considering the global experience of the impact of
the pandemic and the potential of a more sustained spread of the
virus. There remains a large degree of variability in the data and
we are monitoring infection and mortality related claims data on a
weekly basis. We expect to communicate the outcome in the near
term.
FINALISATION OF THE BUSINESS INTERRUPTION CLAIMS PROCESS FOR OLD
MUTUAL INSURE
Following a lengthy period of legal uncertainty, shareholders
are advised that Old Mutual Insure has commenced the process of
finalising all outstanding valid claims for business interruption
for our affected customers.
The complex question as to whether customers with business
interruption extensions for infectious and contagious diseases are
entitled to cover for the COVID-19 pandemic and the related
government enforced national lockdown has been the subject matter
of several court cases.
The recent rulings on this matter by the Supreme Court of Appeal
of South Africa have provided legal certainty and we have therefore
commenced with processing valid business interruption claims with
specific conditions that are materially the same in nature as those
already decided by the courts.
We anticipate that the net business interruption and business
rescue reserves reported for the year ended December 2020 will
increase by between R85 million to R140 million compared to the
amount reported for six months ended 30 June 2020. The net business
interruption and business rescue claims (including reserves) of
R464 million reported for the first half of the year included an
amount to settle business interruption claims of SMME customers
with an annual sum insured of R5 million or below to enable them to
continue operating in a tough economic environment. This settlement
was applied to all our qualifying SMME customers who had the
infectious disease extension at the time of loss.
TRADING STATEMENT
Consistent with our communication of the interim results in
September 2020, in terms of paragraph 3.4(b) of the Listings
Requirements of the JSE Limited, shareholders are advised that we
expect HEPS and EPS for the year ended 31 December 2020 to be more
than 20% lower than the reported HEPS and EPS for the comparable
period (FY 2019 HEPS: 236.1 cents, FY 2019 EPS: 208.3 cents) due to
the significant impact COVID-19 has had on our business operations
and results. A further trading statement will be published to
provide more specific guidance once we have reasonable certainty
regarding the extent of the decline and the related ranges of the
expected decrease in HEPS and EPS.
Sandton
Sponsors
Johannesburg Stock Exchange 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
Tokelo Mulaudzi T: +27 (0)11 217 1042
Investor Relations Manager E: tmulaudzi3@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
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 we have a niche business in China. With 175 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
https://www.oldmutual.com .
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