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SA economy hurts Old Mutual’s performance

South Africa’s economy expanded at the slowest pace in a decade in 2019 as business and consumer confidence plunged.
Image: Moneyweb

Old Mutual, the South African insurer locked in a prolonged spat with its fired chief executive officer, said earnings from its operations probably fell as much as 5%, weighed down by a stuttering local economy.

South Africa’s economy expanded at the slowest pace in a decade in 2019 as business and consumer confidence plunged amid a shortage of electricity and shrinking disposable incomes. Old Mutual is also having to contend with hyperinflation and the worst economic crisis in Zimbabwe in a decade. It’s been in and out of court since firing CEO Peter Moyo in June last year.

Adjusted earnings per share before one-time items will probably increase 4%-9% for the 12 months through December, buoyed by higher returns on investments, Old Mutual said in a statement on Thursday. The shares dropped 0.7% by 10:34 a.m. in Johannesburg, reversing an earlier gain of as much as 2.8%.

Cross-town Johannesburg-based rival Liberty Group, is focusing on taking market share in order to grow earnings, CEO David Munro said on February 27. Liberty’s adjusted EPS rose 44% after South African equities gained 8.2% in 2019.

© 2020 Bloomberg

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. . . and Peter Moyo. LOL!

Err, no ! Old Mutuals performance hurt its performance. It’s a dinosaur. Look at their share price compared to Sanlam’s over the years. Speaks volumes !

OM still thinks it’s oh so great!

My view – it could not have happened to a more deserving bunch of …..

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