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JOHANNESBURG (Reuters) - South Africa’s Sanlam reported a 24% rise in annual profit on Thursday and declared a dividend, as the insurer benefited from the absence of hefty one-time charges that marred its results last year.
The country’s largest insurer had already flagged an increase in headline earnings per share (HEPS) - South Africa’s main profit measure - of up to 29%.
That stood at 448.5 cents in the year to Dec. 31, the first full-year report under new Chief Executive Paul Hanratty who joined in July.
Its rising HEPS was out of step with other financial services firms, all of which have reported declining profit due to the impact of the COVID-19 pandemic.
However, Sanlam said the crisis had generated one of the “most challenging periods” for the group since its listing more than 20 years ago.
Other underlying metrics did suffer, with its measure of operating profit falling 23% and its basic earnings per share plunging 60%.
This was largely due to an already-flagged 726 million rand ($48.19 million) credit impairment provision related to government bonds and banking exposure in Lebanon, as well as a 7.8 billion rand charge announced in the first half that was related to an acquisition.
COVID-19 had a more than 2 billion rand impact on its business, it said, spanning excess claims - largely mitigated through the release of reserves set aside in 2020 - credit provisions and the impact on markets.
But it reported a 25% rise in new business volumes, driven by its growing businesses outside of South Africa, and said it had not seen the expected increase in clients cutting policies, though this could change.
It declared a dividend of 300 cents per share - 10% lower than last year.
($1 = 15.0646 rand)
