Santam earnings up to 60% higher

2010-02-11 09:31

Johannesburg - Santam [JSE:SNT], a short term insurance company, said full year earnings would be up to 60% higher owing to an absence of large scale industrial claims in late 2009.

The group was providing a trading update on the Stock Exchange News Service (Sens) ahead of its year ended December results presentation scheduled for March 3.

"Performance of the investment portfolio was positive and substantially better than the losses of the previous corresponding period, largely due to the strengthening of equity markets," Santam said.

If earnings come in at the lower end of the guidance this will mean that Santam will report around 850c a share. This places it on a price to earnings multiple of around 11.7 times earnings. Headline share earnings were 586c a share for the same period last year.

Shares in Santam have been heavily sold since the start of 2010. The share opened the year at 10850c a share and has lost just over 8% since the first of January to trade at 9950c.

This has been attributed to a sell-off in equity markets generally stemming from concerns that that the global economic recovery is tentative. It is also feared that recent inclement weather, including flooding in South Africa, may negatively impact earnings.