Financial services group Discovery says normalised profit from operations is expected to increase between 5% and 10% for the year ended June 2021, notwithstanding a R2.4 billion Covid-19 hit for Discovery Life compared to R1.1 billion a year ago.
The group was remarkably resilient across all its businesses. The notable material impact on operating profit was the effect of elevated mortality in SA experienced within Discovery Life, it said in a trading statement on Friday (27 August).
It said that headline earnings per share (basic) are expected to be between 900% and 920% higher to between 450 cents per share and 459 cents per share compared to 45 cents for the prior year. Headline earnings are expected to increase as the stabilisation of long term interest rates in SA and the UK resulted in materially lower economic basis changes than the prior year.
Normalised Headline Earnings (NHE) is expected to decrease by between 5% and 15%, impacted by mark-to-market foreign currency losses arising from a recovery of the rand during the reporting year compared to a gain in the previous financial year.
Discovery intends to report its full-year 2021 results on 2 September 2021.
Forecast change in normalised profit from operations over prior year