Listed financial services group, Momentum Metropolitan’ said Thursday (4 March), that while its operating performance continued to improve over the six months ended December 2020, earnings were lower due to Covid-19.
It said that impressive new business growth of 14%, signalled good progress with the turn-around strategy announced in 2018.
Earnings were dampened by the second wave of the Covid-19 pandemic, with normalised headline earnings of R1 012 million, down 43% compared to the prior half year ended December 2019. However, it is a significant recovery from the loss of R251 million that was reported for the second half of the F2020 financial year, Momentum Metropolitan said.
New business volumes increased to R30 billion and value of new business more than doubled to R334 million. Embedded value per share increased to R27.39, up from R25.70 at 30 June 2020.
Operating profit declined 31% to R890 million, while headline earnings per share declined 44% to 55.9 cents per share.
The group declared a cash dividend of 25 cents per ordinary share.
Group CEO, Hillie Meyer, said that he is pleased by the group’s excellent operating performance. “If we exclude the additional Covid-19 provision (of R655 million net of tax) as well as the adverse mortality due to the pandemic, operating profit would have been 31% higher year-on-year.
“Our normalised headline earnings would have been in line with that of the previous period. It is worth noting that, in the first seven months of this financial year, we have paid R6 billion in claims, where we normally pay claims to the value of R6 billion during the entire year.”
Meyer said that for both the group’s retail businesses, Momentum and Metropolitan, the performance during this difficult period represents record sales – the best performance since the merger between Momentum and Metropolitan in 2010.
“This is testament to us winning back clients and intermediaries, and it shows that we continue to improve our competitive position.”
Meyer said he remains cautious about the secondary impact of the pandemic on the economy, as disposable income will remain under pressure, which in turn could dampen new business flows or increase contract terminations. “The group is on a solid financial footing and is well-positioned to adapt to the evolving environment and the changing needs of our clients.”