WEDNESDAY, 1.00PM:
LIFE assurer Sanlam’s earnings fell 31% to R1,2-billion in the year to December, and the poor results could pose a threat to the firm’s planned demutualisation. The demutualisation still requires an endorsement by policy holders and potential shareholders of the new group, before Sanlam can list on the Johannesburg Stock Exchange.
Sanlam executive chairman Marinus Daling blamed the fall in earnings on one-off accounting and actuarial changes made to allow for more prudential financial reporting standards. Daling said the changes played havoc with bottom line earnings and forced the tax bill to rise 67% to R447-million. Daling indicated that without the changes, reported earnings would have been R1,35-billion.
Business Day
reports however, that the figures reflect a poor investment performance by the group, with investment returns on policyholders’ funds restricted to 9,9% or R12-billion, compared to R12,3-billion in 1996.
Sanlam’s main business performed poorly, with operating profit rising a marginal 9% to R1-billion, pushed forward by an 18% rise in premium income to R22-billion.
Daling stressed that the year had been one of financial consolidation, and that corrective action is being taken to repair the damage. “Substantial progress has already been made to address the underlying causes,” he said.
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