Sanlam released its interim results for the six months ended 30 June 2009 this morning. In a nutshell, the Groups performance reflects the following key features:
Earnings
Net result from financial services per share decreased by 4%
Core earnings per share down 2%
Normalised headline earnings per share up 34%
Business volumes
New business volumes up 1% to R51 billion
Net value of new covered business down 3% to R243 million
Net new covered business margin of 2,23%, up from 2,17%
Net fund inflows of R7,7 billion, up 40%
Group equity value
Group equity value per share of R21,72
Annualised return on Group equity value per share of 5,2%
Capital management
Discretionary capital of R2,8 billion at 30 June 2009
Sanlam Life capital adequacy requirements (CAR) cover of 2,5 times.
Sanlam's Group Chief Executive, Johan van Zyl, commented as follows:
"Our results indicate that the Sanlam Group is performing relatively well in the context of the very challenging business environment. I am therefore pleased with our solid operational performance in the first six months of 2009.
"This performance was bolstered by our strategy to diversify the nature of our operations over the past number of years. This diversification includes market segmentation, solutions offerings and geographical presence, which provided a platform for ongoing growth in new business volumes and a sound level of profitability.
"The benefits of our diversification strategy are, for instance, evident in the Group's new business performance in South Africa where the strong performances in our institutional and entry-level market businesses more than made up for the decline in the middle-income retail market volumes at Sanlam Personal Finance and Sanlam Private Investments.
"Our operating profit also reflects a varied performance with a solid contribution from the retail life insurance and capital market businesses, almost offsetting the negative impact of the prevailing market conditions on the earnings of the short-term insurance and investment management operations. Notwithstanding the pressure on earnings, the core operations of all major Sanlam businesses remain sound", Van Zyl said.
Looking ahead he concluded:
"I expect that the challenging business environment of the first six months of 2009 will persist for the remainder of the year. We are nevertheless confident that our businesses are well set to continue weathering the challenges and that our strategy, underpinned by the pillars of optimal capital utilisation, earnings growth, a focus on costs and efficiencies and increased diversification and transformation, will continue to reward our stakeholders."
Get the latest issue of FAnews