5 June 2013
The Group delivered another solid overall performance in the first four months of 2013. The diversification strategy implemented over a number of years introduced some resilience that enabled the Group to absorb the impact of challenging operating conditions experienced by certain Group businesses as well as the relatively weak investment market performance in South Africa for the period. The operating results reported for the four months to April include a maiden contribution from the recent increase in the Group’s holding in Shriram Capital in India.
The salient features of the Group’s performance for the 10 months to October 2013 are:
All of the Group operations remain well capitalised. Sanlam Life Insurance’s statutory capital covered its Capital Adequacy Requirements by 4.0 times on 31 March 2013, after allowing for its dividend payment to Sanlam Limited.
The Group had excess capital of some R4 billion available for redeployment at the end of December 2012, after allowing for the acquisition of a 49% interest in Pacific & Orient, a niche general insurance business in Malaysia, which transaction completed in April 2013. Utilisation in 2013 to date included the acquisition of an additional interest in Shriram Transport Finance Company (announced in February 2013) and the payment of a 50 cents per share special dividend. The disposal of the Group’s interest in the Punter Southall Group in the United Kingdom added to the discretionary capital portfolio. Net of these transactions and investment return, available discretionary capital amounts to some R3 billion. This remains earmarked for growth opportunities in mainly Africa and South-East Asia.
We do not anticipate any material improvement in the economic environment for the remainder of the year. General operating conditions are therefore expected to remain challenging with a resulting impact on the Group’s key operational performance indicators.
Shareholders need to be aware of the impact of the level of interest rates and financial market returns and volatility on the Group’s earnings and Group Equity Value. Relative movements in these elements may have a major impact on the growth in normalised headline earnings and Group Equity Value to be reported for the interim reporting period to 30 June 2013 as well as the full 2013 financial year.
The information in this operational update has not been reviewed and reported on by Sanlam's auditors. Sanlam’s financial results for the six months ending 30 June 2013 are due to be released on 5 September 2013. Shareholders are advised that this is not a trading statement as per section 3.4 of the JSE Limited Listings Requirements.
A conference call for analysts, investors and the media will take place at 17h00 (South African time) today. Investors and media who wish to participate in the conference call should dial the following numbers:
A toll free dial-in facility will be available. We kindly advise callers to dial in 5 - 10 minutes before the conference call starts at 17:00.
South Africa and other countriesToll +27 (0)11 535 3600Toll-free 0800 200 648
USAToll-free 1 866 652 5200
UKToll-free 0808 162 4061
Recorded playback will be available for three days after the conference
Access code for recorded playback: 24049#
South Africa and other countriesToll +27 (0)11 305 2030
USAToll 1 412 317 0088
UKToll 0808 234 6771
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