Staff Writer
Old Mutual Limited delivered adjusted headline earnings of R4.2 billion for the six months ended 30 June 2025, uplifting return on net asset value to 15.5% amid sales and persistency pressures.
The group’s adjusted headline earnings growth of 29% was driven by strong underwriting performance in Old Mutual Insure and strong equity market performance, particularly in South Africa and Malawi.
The Board declared an interim dividend of 37 cents per share, reflecting an increase of 9%.
The group said establishing strategic priorities have been sharpened with an emphasis on focused execution, optimising operational efficiencies and disciplined capital allocation to drive the achievement of a value accretive return on group equity value in the medium term.
“As part of our focus on shareholder value creation, we are pivoting to return on group equity value and cash generation as our value creation metrics. This shift enhances clarity and establishes a demonstrable link between strategic intent, execution and value creation,” the group noted.
The four Group’s strategic priorities are structured to unlock value in the short to medium term, while positioning the Group to generate growth over the medium to long term.
These include: Drive the competitiveness of the South African business » Deepen market leadership in Southern Africa » Establish the right to win for OM Bank » Evaluate and pivot on growth markets.
Results from operations increased by 16% primarily driven by exceptional growth in Old Mutual Insure and favourable market conditions.
“This growth was partially offset by the negative impact of a persistency basis change in Mass and Foundation Cluster and higher central costs, which includes a once-off restructuring provision incurred to reduce future expenditure.”
Adjusted headline earnings grew by 29%, supported by an 88% increase in shareholder investment returns.
Malawi faced elevated equity markets and heightened currency risk as a result of sustained inflationary pressures.
Return on net asset value was 15.5%, within the target range, supported by earnings and ongoing balance sheet optimisation.
However, excluding higher than expected market returns, return on net asset value would have been below the target range.
IFRS profit and headline earnings declined, mainly reflecting reduced profits from the Zimbabwean business after the transition of its functional currency from Zimbabwe Gold to the United States dollar. The impact on net asset value was limited owing to lower currency translation losses reported in equity.
“We saw muted sales growth with present value of new business premiums decreasing by 7%. Life APE sales increased by 1%, with higher retail risk volumes in Mass and Foundation Cluster and good sales in Old Mutual Africa Regions largely offset by lower guaranteed annuity sales in Personal Finance.
Gross flows grew by 7%, driven by good contributions from Wealth Management and Old Mutual Africa Regions, partially offset by lower inflows in Personal Finance. Gross written premiums increased by 5% driven by good growth in Old Mutual Insure.
Looking ahead, The company said the combination of geopolitical headwinds and resilient market sentiment underpins a cautious but constructive outlook for the remainder of 2025.
It said strategic priorities have been sharpened with an emphasis on focused execution, optimising operational efficiencies and disciplined capital allocation.
“Through improved competitive positioning, the Group will be well positioned to lift growth and market share going forward.
“In order to restore our value of new business margin to an acceptable level, we have a strong resolve to drive expense efficiencies, supported by the operating model redesign and leaner corporate centre,” it said.
