The investment holding company, which has investments in MMI Holdings, Discovery, OUTsurance and RMB Structured Insurance, saw income increase to 5.4 billion rand for the six months ending 31 December 2013 from 4.4 billion rand for the same period in 2012.
“The South African macro-economic environment for the first six months of the financial year continued to be challenging. From a local economic perspective we had to contend with a far less benign global financial environment. South Africa was particularly vulnerable to slowing capital flows and the rand weakened rapidly,” [DATA RMI:Rand Merchant Insurance] (RMI) Holdings Limited said.
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“As a result, consumer confidence remained uncertain, with the labour uncertainty and unemployment reducing disposable and/or investible income. For our group companies this resulted in an environment where operating conditions remained challenging and highly competitive during the period under review.”
Investment income decreased by seven per cent in the 2013 period from 234 million rand in 2012 to 218 million rand while profit before taxation rose 31 per cent from 1.4 billion rand to 1.9 billion rand.
Headline earnings attributable to equity holders increased by 25 per cent from 1.1 billion rand in 2012 to 1.4 billion rand in 2013.
OUTsurance made the greatest contribution to group headline earnings in 2013, increasing from 421 million rand in 2012 to 505 million rand while Discovery showed the greatest percentage increase at 35 per cent, with headline earnings rising to 446 million rand in 2013.
Diluted headline earnings per share increased by 24 per cent from 75.4 cents in 2012 to 93.7 cents in 2013.
“South Africa's dependence on foreign capital flows to fund the wide current account deficit continues to introduce uncertainty and vulnerability to the macro-economic outlook. The recent increase in the repo rate is likely to be the first in an interest rate hiking cycle,” it said.
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“This will place further pressure on the South African consumer and growth in new insurance business volumes will continue to be dependent on a recovery in employment and improved disposable income levels. From a shareholder perspective, we believe that all the strategic imperatives required to enable the group to continue to deliver real growth in earnings are in place.”