JOHANNESBURG (Reuters) – South Africa’s Old Mutual Ltd on Tuesday scrapped interim dividends, withdrew targets and warned of a drop in full-year profit after posting a loss for the first half.
The 175-year-old insurer posted basic loss per share of 128.5 South African cents ($0.0764) in the six months to June 30, at the top end of its forecast range of 128.5 and 154.2 cents due to the impact of the coronavirus crisis.
Iain Williamson, who was appointed as chief executive officer permanently in July after leading the company on an acting basis for more than a year, said the level of uncertainty meant it would not declare a dividend for the first six months.
“We believe this action is necessary… and we will revisit this decision for the full-year dividend declaration when we have more clarity on the shape of possible economic recovery scenarios,” Williamson said.
Old Mutual, which in recent years broke up an international conglomerate structure to re-focus on African markets, said it had withdrawn its targets, replacing them with new ones focused on solvency and liquidity and more appropriate to the crisis.
The COVID-19 pandemic has seen insurer taking hefty charges and provisions. That included impairments worth around 9.8 billion rand on goodwill, other intangible assets and property, plant and equipment, and associated undertakings, namely its more than 20% stake in South African lender Nedbank.
Its adjusted headline earnings per share fell 66% to 37.3 cents. Headline earnings per share is the main profit measure in South Africa.