Johannesburg - Financial services group
Sanlam [JSE:SLM] on Thursday
reported a 5% decline in diluted headline earnings per share for the six
months to end-June from 83 cents to 79.2 cents.
However,
normalised headline earnings per share, which the group uses as a more
accurate barometer of performance, reflected a 2% improvement - from
78.9 cents to 80.5 cents.
Commenting on the group's performance,
Sanlam's Group CEO Johan van Zyl said: "The group performed well
despite challenging business conditions during the first six months of
2010, with all key performance indicators reflecting a satisfactory
result on a comparable basis.
"This again confirms the group's
track record of resilient results as our diversification strategy (which
includes market segmentation, solutions offerings and geographical
presence), combined with prudent operational and financial practices,
contributed towards its defensive character in adverse trading
conditions. Our core operations continue to provide a stable base,
complemented by an increasing contribution from investments in new
growth initiatives.
"The group's well-established strategy
successfully supported these interim results. The board and management
remain committed to the group's key objective of maximising shareholder
value. The five pillars of optimal capital utilisation, earnings growth,
cost control and efficiencies, diversification and transformation
underpin this strategy and good progress has been made on all of these
pillars."
Increase in new life businessNew
business volumes for the half-year were down 3% to R50bn, but new life
business volumes increased by 13%. The group said the decrease in total
new business volumes was the combined result of strong growth in new
life business, offset by a decline in new investment business from a
high base in 2009.
The net value of new covered business was up 16% to R283m, with net fund inflows of R6.6bn for the six months.
The
group reported an equity value (GEV) per share of 2 479c for the
period, with an annualised return on group equity value of 9.1%.
Looking
ahead, Van Zyl said that "optimism in the face of uncertainty" best
describes the outlook for the second half of the year.
"2010
started with renewed investor confidence that the worst of the financial
markets crisis was over and that the world was gearing up for
accelerated growth.
"While global economic growth is gradually returning, uncertainty and
risk aversion remain, aggravated by the emergence of sovereign credit
risk in Europe and regular economic data that confirms a prolonged
upturn at best.
"We remain confident and optimistic that the
group will continue to deliver sound operating results. The business
environment is however expected to remain challenging in the second half
of the year, with only slow economic recovery in most of the economies
in which we operate.
"This is not expected to result in any meaningful performance
improvement in the second half of the year compared to the first six
months of 2010 or relative to the strong second half of 2009," he said.
- Fin24.com