Old Mutual approves R1 billion buyback despite lower adjusted earnings

Old Mutual ($OMU) approved a R1 billion share buyback and increased its interim dividend by 8% to 40 South African cents per share. First-half results from operations rose 7% to R5.28 billion, while the corresponding per-share measure increased 11%. Life sales measured on an annual-premium-equivalent basis grew 21%, and the value of new business increased 32%.

However, adjusted headline earnings fell 30% to R2.95 billion, mainly because shareholder investment returns weakened. Profit attributable to shareholders under IFRS declined 5% to R3.89 billion. The insurer also cautioned that some large first-half sales were non-recurring, so sales growth is likely to moderate in the second half. The capital-return announcement therefore accompanies stronger operating activity, but not an across-the-board improvement in reported earnings.

Sources:

• Old Mutual — interim results and dividend declaration, SENS