SA insurance firm Liberty bemoans tough economic environment
Financial services company Liberty Holdings says that the country’s tough economic environment continues to manifest in a weaker mix of business from a margin perspective and lower value of new business in its retail operations in South Africa.
The company, which offers asset management, investment, insurance and health products, published a voluntary update for the six months ended June 2017.
Liberty said that its six months headline earnings and normalised headline earnings are lower than the first half of 2016, but reflect a recovery in comparison to the second half of 2016.
The group said that it remains well capitalised, towards the upper end of the target range at 30 June 2017.
“The capital position of Liberty Group Limited, the main long-term insurance licence, remained strong compared to the 31 December 2016 position, despite the impact of the recent downgrade of South Africa’s sovereign credit rating.
“This strong capital ratio underpins the group’s ability to fulfil its commitments to all its stakeholders,” it said.
The group noted that STANLIB South Africa has also experienced margin pressure due to the weaker investment markets. “STANLIB’s earnings have been further impacted by certain operational write-offs,” it said.
Liberty advised that basic earnings per ordinary share and headline earnings per ordinary share are expected to be between 8% to 18% lower than the six months ended June 2016, resulting in basic headline earnings per ordinary share and headline earnings per ordinary share expected to be between 546.9 cents and 613.5 cents per ordinary share.
It further advised that normalised headline earnings per share are expected to be 25% to 35% lower than the comparative period, resulting in normalised headline earnings per share expected to be between 422.5 cents and 487.5 cents per ordinary share.
Liberty Holdings expects to publish its interim results on 4 August 2017.
Read: SA economy has already returned to positive growth: economist
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