South Africa’s biggest insurer Sanlam said on Thursday its annual profit fell 19%, coming in the middle of a range it flagged last week, as it recorded a number of one-time charges.
The company had warned its headline earnings would drop by between 15% and 25%, dragged down by a R1.7 billion expense related to a black economic empowerment transaction and a range of other charges.
Its headline earnings per share – the main profit measure in South Africa – fell to 357.9 cents ($0.2186) in the year to December 31, from 441.1 cents a year earlier, as higher claims across its newer markets also dented its bottom line.
Sanlam, however, said its underlying operational performance was “solid”, especially in a difficult economy and volatile global markets.
“Our diversification across geographies, market segments and lines of business … helped us navigate these challenges to continue to deliver strategic value to shareholders,” it said.
Its net operational earnings – a new performance measure it introduced in the results, expanding on its previous measure of operating profit – grew by 14%.
The company, on a drive to expand across the African continent, said the unit housing the businesses in its newer markets was the biggest earnings driver, with a 29% jump in profit.
That unit includes SAHAM Finances, Sanlam’s newly acquired Moroccan business. Sanlam bought the business, which operates in 26 countries via 65 subsidiaries across the continent, for $1 billion in March 2018 – the 101-year-old company’s largest-ever purchase.