Acquisition hits Discovery earnings
Johannesburg - Discovery Holdings [JSE:DSY], South Africa's largest health insurer, posted a 16% drop in first-half earnings on Tuesday, hit by the cost of acquisitions, and said it would launch a US venture with Humana.
Discovery, which last year bought a unit of Britain's Standard Life, said diluted headline earnings per share totalled 114.6 cents in the six months to end-December, compared with 135.9c a year earlier.
Discovery said this month earnings were likely to fall as much as 20%, citing the cost of the R1.6bn acquisition of UK-based Standard Life Healthcare in May.
Excluding the impact of such transactions, Discovery said earnings rose by a quarter.
Revenue from insurance premiums rose 83% to nearly R6bn.
The company said it would launch a joint venture with US insurer Humana Inc to provide a wellness programme in the world's biggest economy.
Discovery will own a quarter of the partnership, while Humana will take the same size stake in a Discovery US unit.
Discovery, which also owns a stake in China's Ping An Insurance, has been looking for opportunities in overseas markets as its once-rapid growth in South Africa slows.
CEO Adrian Gore told Reuters last year the company could eventually target India as it looks for more opportunities in Asia.