Sanlam’s profit little changed

Insurer Sanlam says full-year profit rose 2.3% after the value of new life business slumped and growth in its home market slowed.

Johannesburg - Sanlam, the largest South Africa-based insurer, said full-year profit rose 2.3 percent after the value of new life business slumped and growth in its home market slowed.

Net income for the 12 months through December climbed to R8.94 billion ($587 million) from R8.74 billion a year earlier, the Cape Town-based company said in a statement on Thursday. Normalised earnings per share excluding one-time items increased 6 percent to R4.32, beating the R4.28 adjusted-EPS median estimate of eight analysts surveyed by Bloomberg. The dividend rose 9 percent to R2.45 a share.

Read: Santam, Sanlam expand African footprint

Sanlam, which started in 1918, operates in Africa, Europe, the UK, the US, India and Malaysia. It has been expanding in African and Asian countries to find new regions that may help boost profit as growth in its home market slows. In South Africa, inflation and interest rates are rising along with unemployment, while the stock market gained just 1.9 percent last year, crimping returns for insurers. The country’s credit rating is at risk of being downgraded to junk this year.

“We expect the challenging economic climate to persist in 2016,” Chief Executive Officer Ian Kirk said in a separate emailed statement. The net value of new life insurance business declined 15 percent to R1.4 billion, the company said.

BLOOMBERG