Old Mutual praises South Africa's unity governme...

Old Mutual praises South Africa's unity government as earnings jump 14%

Nyashadzashe Ndoro- Chief Reporter

Zimbabwe Stock Exchange-listed African financial giant, Old Mutual, has praised South Africa's government of national unity, citing its positive impact on the country's economic environment and boosting the company’s 2024 performance.

In its 2024 annual report, the financial services group noted that the formation of the unity government had enhanced investor confidence and contributed to improved economic prospects.

"In South Africa, the formation of the government of national unity, coupled with early momentum in the macroeconomic environment and improved load shedding, boosted investor confidence," the company stated.

In the Old Mutual Africa Regions, the company reported that several countries experienced significant inflationary pressures, with Malawi particularly affected. Old Mutual also noted rising geopolitical vulnerabilities.

"In 2024, rising geopolitical vulnerabilities and emerging challenges strained international policy coordination and collaboration, impacting the pace of growth in the short term," the company said.

The group reported a strong 14% increase in adjusted headline earnings, with adjusted headline earnings per share rising by an impressive 17%.

The company also recorded a 4% growth in results from operations, which increased to 7% on a per-share basis. Excluding investments in new growth initiatives, results from operations showed an even stronger growth of 10%.

This was primarily driven by exceptional underwriting results in Old Mutual Insure and strong contributions from Wealth Management and Old Mutual Investments. While Personal Finance experienced lower profits, Old Mutual Africa Regions continued to contribute positively to earnings, with all segments delivering results from operations in excess of R1 billion.

Furthermore, Old Mutual maintained a strong cash generation profile, with cash remitted from subsidiaries reaching R10.5 billion for the year, representing 158% of adjusted headline earnings.

This robust cash flow enabled the declaration of a final dividend of 52 cents per share, bringing total dividends for 2024 to 86 cents per share, representing a 6% growth and a dividend cover of 1.6 times.

The company's balance sheet also remained solid, with a Group shareholder solvency ratio of 182% and OMLACSA's regulatory solvency ratio at 187%, both well within their respective target ranges.

Old Mutual accelerated its digital and technology transformation, decommissioning 21 legacy systems and increasing active digital users by 22%.

Progress was also made in the build phase of their new Savings and Income proposition and the successful rollout of their digital two-pot retirement solution in South Africa.

The company said the launch of OM Bank is progressing well, with regulatory approvals received and key leadership appointments made, positioning it for a national rollout by the fourth quarter of 2025.

Old Mutual is a premium African financial services group that offers a broad spectrum of services to retail and corporate customers across key market segments in 12 countries, including Zimbabwe.

Old Mutual’s primary operations are in Africa, and it also has a niche business in China.