Old Mutual profit climbs on Skandia

LONDON – South Africa’s largest insurer, Old Mutual , met forecasts with a 36 per cent increase in first-half profit, helped by Sweden’s Skandia and a turnaround at subsidiary Nedbank , and boosted its dividend.

London-listed Old Mutual, which included Skandia in its earnings for the first time since the January takeover, said Skandia profits beat expectations and South Africa benefited from strong banking profits, while the US was on track to release cash from next year. “We expect the progress seen in the first half to continue as our businesses mature and we remain on track for the full year,” Old Mutual Chief Executive Jim Sutcliffe said.The group’s adjusted operating profit rose to 771 million pounds (N$10,6 billion) under IFRS standards.”Our IFRS earnings were strong and we think they have the potential to grow further in future,” Sutcliffe told analysts.On the alternative, European embedded value (EEV) basis, the insurer said its adjusted operating profit rose to 39 per cent to 885 million pounds.EEV is a benchmark based on the worth of an insurer’s assets and future profitability of its policies.The median forecast in a Reuters poll of seven analysts was for operating profit of 771 million pounds under IFRS and 913 million under EEV.The company’s own consensus IFRS forecast was for 756 million pounds.”Skandia has undoubtedly performed better than we’d expected,” Sutcliffe said.Old Mutual boosted its interim dividend by 13,5 per cent to 2,1 pence per share, above expectations, helped by an extraordinary dividend announced last month by its insurance subsidiary Mutual & Federal.”When we declared a dividend at the end of last year, we were a little bit cautious.We hadn’t had the opportunity to have a good look at Skandia, so there’s a little bit of catch up here,” Sutcliffe told reporters in a conference call.”We’re confident that we’ll continue to deliver good dividend growth in the future.”Nampa-Reuters”We expect the progress seen in the first half to continue as our businesses mature and we remain on track for the full year,” Old Mutual Chief Executive Jim Sutcliffe said.The group’s adjusted operating profit rose to 771 million pounds (N$10,6 billion) under IFRS standards.”Our IFRS earnings were strong and we think they have the potential to grow further in future,” Sutcliffe told analysts.On the alternative, European embedded value (EEV) basis, the insurer said its adjusted operating profit rose to 39 per cent to 885 million pounds.EEV is a benchmark based on the worth of an insurer’s assets and future profitability of its policies.The median forecast in a Reuters poll of seven analysts was for operating profit of 771 million pounds under IFRS and 913 million under EEV.The company’s own consensus IFRS forecast was for 756 million pounds.”Skandia has undoubtedly performed better than we’d expected,” Sutcliffe said.Old Mutual boosted its interim dividend by 13,5 per cent to 2,1 pence per share, above expectations, helped by an extraordinary dividend announced last month by its insurance subsidiary Mutual & Federal.”When we declared a dividend at the end of last year, we were a little bit cautious.We hadn’t had the opportunity to have a good look at Skandia, so there’s a little bit of catch up here,” Sutcliffe told reporters in a conference call.”We’re confident that we’ll continue to deliver good dividend growth in the future.”Nampa-Reuters