Sanlam braces for tough second half amid pressure on valuations
The group wrote down some of its businesses by R7.6bn in its six months to end-June
Insurance group Sanlam expects the last six months of 2020 to be increasingly challenging, having swung into a first-half basic loss as Covid-19 weighed on the value of its businesses.
Reduced growth and future investment return assumptions in the short to medium term led to a R7.6bn writedown of some of the group’s businesses in its six months to end-June.
The group reported a loss attributable to shareholders of about R3.5bn for the period, from profit of R3.4bn previously, saying the first half of the year was one of the most challenging periods it had faced.
“The operating environment will remain challenging in the second half of 2020, with the eventual outcome of Covid-19 subject to significant uncertainty,” the group said.
Restrictions on the movement of people remain in force in some of the group’s market, and this has been aggravated by deteriorating economic conditions and rising unemployment, the group said.
The group said it had prudently managed its capital and had experienced a 40% growth in new-business volumes and 44% in net fund flows.
Headline earnings, which excludes the effects of impairments, rose 10% to R3.89bn.
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