REG - Old Mutual Ltd - Voluntary Operating Update

Old MutualAnnouncement

25/05/2023 11:45

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RNS Number : 6652A  Old Mutual Limited  25 May 2023

Old Mutual Limited

Incorporated in the Republic of South Africa

Registration number: 2017/235138/06

ISIN: ZAE000255360

LEI: 213800MON84ZWWPQCN47

JSE Share Code: OMU

LSE Share Code: OMU

NSX Share Code: OMM

MSE Share Code: OMU

ZSE Share Code: OMU

 

("Old Mutual" or "Company" or "Group")

 

Ref 44/23

25 May 2023

 

OLD MUTUAL VOLUNTARY OPERATING UPDATE FOR THE QUARTER ENDED 31 MARCH 2023

The global macro-economic environment remains challenging however easing of
the COVID-19 policy in China has boosted economic activity. Our customers'
disposable income remains under pressure due to rising inflation and interest
rate increases. The sustained high levels of load shedding in South Africa
continues to reduce customers confidence.

Financial key performance indicators for the quarter ended 31 March 2023

 

The table below sets out certain key performance indicators for the quarter
ended 31 March 2023.

 Key Performance Indicators                31 March 2023  31 March 2022  change

 (R millions unless otherwise indicated)
 Life APE sales                            2 873          2 890          (1%)
 Gross flows                               49 046         40 197         22%
 Net client cash flow                      899            (4 999)        >100%
 Loans and advances(1)                     19 023         19 009         0%
 Gross written premiums                    6 512          5 465          19%

(1)Comparative amounts represent FY2022 balance sheet amounts.

Life APE sales were marginally lower compared to the prior period despite good
sales momentum in our retail segments. The decrease in Life APE sales was
driven by lower savings products sales in the broker channel in China as we
ceased selling certain products in anticipation of regulatory changes.
Excluding China, Life APE sales were 7% up on the prior period due to growth
in credit life sales and strong risk sales in Mass and Foundation Cluster
driven by good momentum in productivity levels as observed in issued sales
compared to the prior period. Personal Finance and Wealth Management delivered
higher single premium guaranteed annuity sales and better recurring premium
savings sales compared to the prior period due to improved productivity
levels. Old Mutual Africa Regions sales were above the prior period mainly due
to corporate sales growth in East Africa driven by new business secured,
renewals and improved productivity.

Persistency remains under pressure despite the strengthening of our
persistency basis as at 31 December 2022.  We remain focused on deploying the
identified set of management interventions which we expect to mitigate the
persistency pressure. We expect this together will our sales momentum to
contribute positively to value of new business.

Gross flows increased by 22% mainly due to strong flows in Old Mutual
Investments driven by higher inflows into money market, fixed income and
corporate cash products in Futuregrowth as well as higher Alternative flows
compared to the prior period. The increase in flows was also driven by new
business secured and high unit trust sales in East Africa.

 

Net client cash flow improved compared to the prior period mainly due to
strong growth in flows. This was partially offset by large outflows in Wealth
Management across all platforms.

 

There has been no significant movement in loans and advances compared to the
prior period. A slight increase in Mass and Foundation Cluster was offset by a
decrease in Old Mutual Africa Regions. This decrease was driven by depressed
disbursements in line with our stricter lending criteria and write offs in our
non-performing loan book due to tough economic conditions.

 

Gross written premiums grew by 19% from the prior period mainly due to better
retention and new business growth in both the medical and general insurance
book in Old Mutual Africa Regions. Good premium growth in Old Mutual Insure
across all divisions and the acquisition of Genric Insurance Company Limited
contributed to the growth in gross written premiums.

Capital

The Group solvency ratio remains stable within our target range of 170% -
200%.

The Group discretionary capital balance as at 31 March 2023 has decreased to
R1.4 billion from the R3.5 billion reported at 31 December 2022 principally as
a result of capital allocations. This includes the Genric Insurance Company
Limited acquisition of R300 million, minority buy of Old Mutual Finance
Namibia of N$214 million in the first quarter of 2023 and the share buyback to
return up to R1.5 billion to shareholders. The Group has received approval
from the Board and Prudential Authority for the share buyback. We are in the
process of execution which is expected to be completed during 2023. The
discretionary capital balance of R1.4 billion has been earmarked for the
acquisition of an equity stake in the Two Mountains Group which is still
subject to regulatory approvals as well as continued investment in our growth
and innovation initiatives.

 

Investor engagement

 

Investors are invited to participate in a conference call to address matters
related to this voluntary operating update on 25 May 2023 at 17:15pm, SAST.
Investors and media may register on the following link:
https://www.oldmutual.com/investor-relations
(https://www.oldmutual.com/investor-relations) .

Please note that registered participants will receive their dial in number
upon registration. We advise callers to dial in at least five minutes before
the conference call starts.

A recorded playback will be available for three days after the conference
call.

Access numbers for recorded playback:

Access code for recorded playback: 44293

 South Africa   010 500 4108
 UK             0 203 608 8021
 Australia      073 911 1378
 USA            1 412 317 0088
 International  +27 10 500 4108

 

The financial information in this voluntary operating update is the
responsibility of the Old Mutual Board of Directors and has not been reviewed
or reported on by the Group's external auditors.

 

Sandton

 

Sponsors

 

JSE
 
           Merrill Lynch South Africa (Pty) Limited t/a BofA
Securities

Malawi
                    Stockbrokers Malawi
Limited

Namibia
                   PSG Wealth Management (Namibia)
Proprietary Limited

Zimbabwe
                     Imara Capital Zimbabwe plc

 

 Enquiries

 

 Investor Relations

 Bonga Mriga                          M: +27 67 866 6348

 Interim Head of Investor Relations   E: investorrelations@oldmutual.com

 Communications

 Vuyo Mwata                           M: +27 68 422 8125

 Head of Group Communications         E: oldmutualnews@oldmutual.com

 

Notes to Editors

 

About Old Mutual Limited

 

Old Mutual is a premium African financial services group that offers a broad
spectrum of financial solutions to retail and corporate customers across key
market segments in 14 countries. Old Mutual's primary operations are in
Africa, and it has a niche business in Asia. With over 178 years of heritage
across sub-Saharan Africa, Old Mutual is a crucial part of the communities it
serves as well as broader society on the continent.

For further information on Old Mutual and its underlying businesses, please
visit the corporate website at www.oldmutual.com (http://www.oldmutual.com) .

 

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