Old Mutual interim results hurt by weak rand

Volatility in global markets and persistent stress in the rand saw Old Mutual report a decline in earnings for the six months to end-June 2016

In its results released on Thursday, Old Mutual reported pre-tax adjusted operating profit of £708 million, down 9% in constant currencies but 22% softer in reported currency.

Adjusted operating profit earnings per share at 8.0 pence decreased 11% in constant currencies and 22% in reported currency.

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Old Mutual’s profits for the first half of the year stood at £608 million, a decrease of 11% from the same period last year. On its preferred adjusted measures, profits from Old Mutual Emerging Markets were down 22%, Nedbank profits lost 15%, Old Mutual Wealth profits shed 31% and Institutional Asset Management profits fell 30%.

Commenting on the results, CEO Bruce Hemphill said  the macro environment has been challenging, with a weaker rand against the first half of 2015.

Hemphill however noted that the group’s underlying performance demonstrated the strength of its franchises and the positive momentum within each business.

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OMEM (Old Mutual Emerging Markets) recorded a solid operational performance, with a strong contribution from the South African life business while Nedbank also recorded very strong performance from its South African operations.

As announced earlier in the year, the group’s revenues will be affected by an extended period of rand weakness and lower equity market levels. The average value of the rand versus sterling was 22% lower compared to the first half of 2015, while the average value of the US dollar was 6% stronger.

– News24 Wire