South Africa's Old Mutual reported a 7% rise in adjusted full-year profit on Monday but warned it expects to miss key targets next year as the increasing economic damage from the coronavirus is set to weigh on the insurance group's performance.
The insurer's adjusted headline earnings per share for the year to Dec. 31 stood at 209.3 cents ($0.1283), versus 195.1 cents a year earlier. Headline earnings per share is the main profit measure in South Africa.
Old Mutual said it expects to miss its growth target of two percentage points above nominal GDP growth in results from operations, as it restricts travel by employees to limit risk of infection for employees and customers.
Our business was resilient against significant headwinds in 2019"
"Our business was resilient against significant headwinds in 2019," Old Mutual's statement said, pointing to a weak economy in its home market and many others across the continent.
The group said it has conducted stress tests to model the effect of "perfect storm"-type scenarios, and concluded the group would remain sufficiently capitalised and have sufficient liquidity should these occur.
"While we continue to see challenges in the external environment in the short term, including those presented by the Covid-19 pandemic as well as the economic downturn, we are confident in the group's ability to remain resilient and deliver on our mandate," said interim CEO Iain Williamson.
Old Mutual has confirmed that one of its employees has tested positive for the coronavirus after returning from abroad.
The company would not disclose where in South Africa the person was located but said the employee was told to not return to the office for another 21 days, in line with its international travel policy.
The company's stock sunk in 2019 partly due to a spat with former boss Peter Moyo over his abrupt sacking in June following a dispute over a conflict of interest.
Williamson said that while the hunt for a new CEO was underway, he deferred questions on what stage the process was at and possible time frame to the board.
"I suspect they would like it done in the next few months," he said.
Old Mutual announced a final ordinary dividend of 75 cents per share, bringing its total capital returned to 220 cents per share, including share buybacks executed during 2019.
In 2018, Old Mutual reduced its interest in Nedbank, and its UK wealth management business Quilter was unbundled and separately listed in London, with a secondary inward listing on the JSE.