First Brands Group debt targeted by Apollo Global Management - report
Investing.com -- Old Mutual reported results with recurring funds from operations (RFO) approximately 9% ahead of expectations and 5% above consensus estimates, while adjusted headline earnings were about 24% higher than both analyst forecasts.
The company declared a dividend per share of 37 cents, in line with expectations, as were new business volumes. However, margins came in significantly weaker at 1.4% compared to consensus expectations of 2.6%.
Old Mutual announced a R3 billion share buyback program, substantially exceeding UBS expectations of approximately R2 billion.
The company achieved its RFO beat despite setting aside a large central cost provision of around R440 million, which analysts suggest should allow for an improved outlook. OM Insure was a standout performer with solid underwriting margins of 9.7% versus the expected 6%.
In the Mass segment, Old Mutual made a contractual service margin (CSM) lapse basis change of approximately R2 billion, impacting earnings by around R449 million. Overall CSM growth was limited to about 1%, affected by a R2.2 billion reduction in the Mass segment, though new disclosures revealed robust CSM growth elsewhere. Mass showed 5% growth excluding the basis changes.
The weaker margins were primarily attributed to modeling changes that added prudence and lower guaranteed annuity volumes in Personal Finance, which declined approximately 40% year-over-year. Group equity value (GEV) was 5% lower, driven by modeling changes (-2%) and a lower non-covered business valuation (-2.5%).
The company maintained its outlook as "cautious but constructive" with no material changes to guidance. Management emphasized its focus on expense efficiencies and disciplined capital allocation going forward.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.