Share Search
Visit the Share Search
Old Mutual predicts H1 loss as Covid-19 hits trading
24th Aug 2020 09:55
(Sharecast News) - Old Mutual predicted it would suffer a first-half loss after the insurer was affected by weak sales and rising claims caused by the Covid-19 crisis.
The company forecast a loss of between 128.5 and 154.2 South African cents a share in the six months to the end of June. In the same period a year earlier the company had earnings of 127.3 cents a share.
Old Mutual predicted an IFRS loss after tax of as much as 6.75bn rand (£300m), aggravated by the reduced value of its investment in Nedbank and goodwill for Old Mutual Finance. Higher credit spreads also caused large mark-to-market losses at its investment business.
The South Africa-focused insurer said Covid-19 continued to have an unprecedented impact on its business and that government restrictions had damaged economic activity in the first half and prospects for the rest of the year.
New business sales fell as most of the company's advisers were unable to sell during lockdown, Old Mutual said. Sales are still lower than a year ago after lockdown measures eased, it said. The company was also hit by an increase in business interruption insurance claims caused by coronavirus.
The company's shares rose 0.7% to 56.66p at 10:35 BST.
Old Mutual appointed chief executive Iain Williamson as chief executive in July after a year of turmoil caused by the company's decision to fire Peter Moyo in June 2019 over an alleged conflict of interest. Williamson had been running the company since Moyo's departure.
The company forecast a loss of between 128.5 and 154.2 South African cents a share in the six months to the end of June. In the same period a year earlier the company had earnings of 127.3 cents a share.
Old Mutual predicted an IFRS loss after tax of as much as 6.75bn rand (£300m), aggravated by the reduced value of its investment in Nedbank and goodwill for Old Mutual Finance. Higher credit spreads also caused large mark-to-market losses at its investment business.
The South Africa-focused insurer said Covid-19 continued to have an unprecedented impact on its business and that government restrictions had damaged economic activity in the first half and prospects for the rest of the year.
New business sales fell as most of the company's advisers were unable to sell during lockdown, Old Mutual said. Sales are still lower than a year ago after lockdown measures eased, it said. The company was also hit by an increase in business interruption insurance claims caused by coronavirus.
The company's shares rose 0.7% to 56.66p at 10:35 BST.
Old Mutual appointed chief executive Iain Williamson as chief executive in July after a year of turmoil caused by the company's decision to fire Peter Moyo in June 2019 over an alleged conflict of interest. Williamson had been running the company since Moyo's departure.