JOHANNESBURG - Old Mutual Ltd posted a 12% drop in adjusted full-year profit on Monday, missing its 2018 targets as a sluggish economy weighed on South Africa’s No.2 insurer’s first year as a stand-alone Africa-focused entity.
But cash-strapped consumers in South Africa have struggled to keep up with premium payments while currency devaluation weighed on its operations in Zimbabwe. The bottom line was also hit by weaker results from operations , which missed the company’s own growth target of gross domestic product growth plus 2%. Operating profit fell 4% to R10 billion in 2018. South Africa’s GDP growth was 0.8%.The share buyback brings the money returned to shareholders since becoming a standalone entity to R52 billion, according to a company statement.
Chief executive Peter Moyo said he hoped the distributions that equate to nearly half Old Mutual’s market capitalisation, would be enough to lift the company’s share price after it missed its own targets with the drop in annual profit. “It would be good if ,” he told Reuters in an interview. “But the thing for us is we are serious about delivering what we promised to the market.”
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