MMI expects drop in diluted core headline earnings a share
The group said it used diluted core headline earnings a share to monitor its operational performance.
The group expected its diluted core headline earnings to be between 170cents a share and 190c, down from 200c last year.
“Diluted core headline earnings have been negatively affected during the period by various factors, including increased investment in client engagement activities, higher expenditure in technology, and weaker persistency in Metropolitan Retail.
“Also, MMI’s share of losses increased, in line with business plans, on new initiatives such as the India joint venture,” the group said in a statement on Friday.
MMI also reminded its shareholders that MMI executive management had introduced a number of recent changes to the organisation in order to focus on the practical implementation of its strategy.
“We have reset the business to provide a strong foundation for improved performance and future growth. We are confident that these changes will create value for shareholders in due course,” the group added.
In Momentum Corporate, the group said profits had improved with group underwriting results, showing an improvement year-on-year, while good expense management also contributed to their improved results. Strong mortality and morbidity profits across the group boosted core earnings.
Its basic earnings per share were also expected to decline by between 5 and 15percent, to between 84c and 94c compared to 98c, while headline earnings per share were expected to show a decrease of between 15 and 25percent, to between 89c and 101c compared to 118c last year.
“Basic and headline earnings have both been negatively affected by significant basis changes in Momentum Retail and Metropolitan Retail and the weak investment markets of financial year 2017 resulting in a lower starting asset base for the current year.”
MMI explained that basic earnings decreased by less than headline earnings, mainly due to a reduction in the impairment of intangibles compared to financial year 2017.
The group said that it must be noted that MMI excluded fair value gains, impairment of intangibles, movement in value of MMI shares held in policyholder funds, investment variances and non-recurring items from core headline earnings, whereas basic earnings include all these items.
MMI will release its final results on September 5.
The share price closed 1.27percent weaker at R16.39 on the JSE on Friday.
– BUSINESS REPORT
Source: iol.co.za
