Old Mutual to scrap 2009 dividend, profits fall

Insurer Old Mutual said on Wednesday that it would scrap its dividend in 2009 to preserve cash while its 2008 statutory profit fell 38% as deteriorating financial markets and troubles at its United States unit continue to weigh.

South Africa’s largest insurer said 2008 statutory operating profit was £999-million, down from £1,62-billion a year earlier. Adjusted operating earnings per share on a statutory basis was in line with expectations at 12,2 pence, dropping from 16,9 pence in 2007.

“2008 presented major challenges for the group,” chief executive Julian Roberts said.

“The rapid deterioration combined with volatility in global financial markets, most notably in the fourth quarter, gave rise to an extremely difficult operating environment, while we faced a number of specific issues in our US Life business,” he added.—Reuters