OUTsurance Holdings (OHL), formerly Rand Merchant Investment Holdings, said yesterday its earnings for the six months to December 31 would primarily be derived from its 90%-held subsidiary and owner of OUTsurance South Africa, and the Youi Australia insurance operations.
The results follow the group’s disposal of Hasting Group and the settlement of preference debt in 2021, and the unbundling of the interests in Discovery and Momentum Metropolitan Holdings in April 2022.
OHL said in a trading statement yesterday that normalised earnings per share (NEPS) – from continuing and discontinued operations – was expected to be more than 20% lower than the NEPS from continuing and discontinued operations of 125.5 cents per share reported in the comparative period.
OHL said its performance for the six months included a significant increase in Youi’s earnings, which in turn was attributed to strong premium growth, a big decrease in natural perils claims after more favourable weather, and higher investment income from the rising interest rate environment.
OUTsurance South Africa experienced favourable operating conditions owing to premium growth, and claims experience that were in line with historic performance.
OHL’s normalised earnings, excluding the normalised earnings impact of its stake in Hastings was expected to increase by more than 20% for the six-month period.
The financial results of Hastings, Discovery and Momentum Metropolitan would be treated as discontinued operations in the financial results.
In the comparative period, R5.7 billion was included under results from discontinued operations relating to the equity accounted earnings of Hastings, Discovery and Momentum Metropolitan, and the profit on the sale of Hastings. Some R418 million of funding costs was included under results from continuing operations.
Due to these material, non-recurring items, earnings per share from continuing and discontinued operations for the six months ended December 31, 2022 was expected to be more than 70% – more than 287.6 cents per share – lower than the EPS from continuing and discontinued operations of 410.9 cents per share reported in the comparative period.
OHL’s share price fell 0.09% to R34.69 but it was still 22% above where the share traded three months ago. Just prior to the group’s restructuring last year the price traded above R48.
BUSINESS REPORT