Momentum Metropolitan upbeat in challenging economy

Momentum Metropolitan said it delivered a pleasing set of results for the first quarter of the F2020 financial year.

Diluted normalised headline earnings per share, increased by 13% year-on-year, the group said in an operational update for the three months ended September 2019.

It pointed out that results for a single quarter can be quite volatile, and one should be cautious not to annualise the results.

Most business units were able to grow earnings year-on-year, Momentum said. Star performers for the period were Guardrisk, the Health operations, and Momentum Investments.

New business volumes were down 24% relative to 1Q2019, “but that can be explained by the exceptional new business volumes recorded by Momentum Corporate in 1Q2019,” it said.

“If we exclude Momentum Corporate, new business volumes were up 12% across the other business units. We believe that the 12% growth rate is indicative of the progress we are making in the various retail segments.

“Overall, we are satisfied with the results, which are in line with our three-year turnaround plan.”

The plan, the financial services group said, is to continue focusing on bolstering our product and distribution capabilities, as well as on enhancing client service and value proposition.

Momentum Metropolitan said that the diluted normalised headline earnings, the group’s primary earnings metric, increased by 9% to R0.9 billion for the first quarter.

The present value of new business premiums (PVNBP) for the first quarter was R13.0 billion, which is 24% lower than in the comparative period.

“This decline is fully explained by the strong new business in Momentum Corporate in 1Q2019, including a R5 billion with-profit annuity transaction,” the group said.

Momentum Investments delivered strong new business growth of 20%, mainly from offshore wealth products and from life annuities. Momentum Life delivered growth in long-term savings products, which was offset by lower protection new business.

Looking ahead, Momentum said that the operating environment in South Africa remains challenging, with low levels of business and consumer confidence, sluggish economic growth and high levels of unemployment, which all continues to put pressure on clients.

“This understandably has a moderating effect on our business activity and on our financial results,” Momentum Metropolitan said.

“We remain cautiously confident that we will achieve our three-year Reset and Grow target of between R3.6 billion and R4.0 billion normalised headline earnings in F2021,” it said.

Read: Momentum earnings boosted by new business

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Momentum Metropolitan upbeat in challenging economy