(Alliance News) - Old Mutual Ltd on Tuesday reported sharply lower profit last year as it grappled with the difficult macro-economic environment and market volatility.
The Anglo-South African financial services firm said pretax profit dropped by 31% to ZAR9.20 billion in 2022 from ZAR13.43 billion in 2021.
Revenue slumped to ZAR113.21 billion, down 54% from ZAR247.81 billion.
Gross flows were 9% lower at ZAR178.03 billion from ZAR194.80 billion because results in the prior year included large transactions in Old Mutual Investments and Old Mutual Corporate which did not repeat in the current year.
Lower annuity sales and a decrease in demand for offshore investments in Personal Finance and Wealth Management also contributed to the decline in gross flows.
Funds under management fell by 4% to ZAR1.228 trillion from ZAR1.273 trillion, thanks to weaker market performance in South Africa and globally.
The group reported negative net client cash flow amounting to ZAR12.43 billion, compared to growth of ZAR92 million. This was primarily due to the decline in gross flows combined with large disinvestments and terminations in Wealth Management and Old Mutual Investments respectively.
Old Mutual declared a final dividend of 51 rand cents, taking the full payout to 76 cents from 67 cents.
Headline earnings per share rose by 10% to 180.1 cents from 163.8 cents, while earnings per share increased by the same percentage margin to 166.0 cents from 151.3 cents.
The group said economic activity continues to be hampered by significant interest rate increases, while severe Covid-19 lockdowns in China dampened growth in 2022. Loadshedding in South Africa, it added, continues to affect economic activity.
Looking ahead, Old Mutual warned that the macro-economic environment in its markets is expected to remain challenging, which will continue to exacerbate financial pressure on its customers.
By Artwell Dlamini, Alliance News reporter
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Old Mutual Lim. (OMU)