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Interim Results 2018 Interim Results 2018

2018 Interim results

Operating conditions were very challenging during the first six months of 2018 across a number of markets where Sanlam operates.

Investment market volatility, a stronger average Rand exchange rate and a weak South African economy in particular dampened growth prospects for our key performance indicators. The Group’s well-diversified profile across geographies, market segments and client offerings again provided resilience against these headwinds, enabling us to deliver an acceptable operational performance for the six months ended 30 June 2018. The Group’s strategic intent of sustainable value creation for all key stakeholders remains firmly in place and we continued to execute on all strategic pillars in the first half of 2018.

Highlights

Most of the Group’s businesses achieved a solid underlying performance in the first half of 2018 despite challenging economic and investment market conditions. Particularly pleasing is the annualised adjusted Return on Group Equity Value (RoGEV) of 18,2% delivered to shareholders, exceeding the target of 13% for 2018.

Some of the strategic highlights for the first six months of 2018 include the favourable 3% capital raise to de-risk the Saham Finances transaction, the conclusion of Capitec Bank agreements (credit life underwriting and distribution of other products), and an increase in available discretionary capital to R9,9 billion - earmarked for the Saham Finances transaction.

Ian Kirk

Group Equity Value per share

7,4% for the six months

Net result from financial services

+ 8% up 10% in constant currency

New business volumes

R110bn -1%

Net value of new covered business (VNB)

R791m +1%

Net VNB margin

2,46% 2,61% in 2017

Key Features

Earnings

  • Net result from financial services increased by 8% (up 10% in constant currency)

Business Volumes

  • Net value of new covered business up 1% to R791 million (up 4% on consistent economic basis)
  • Net new covered business margin of 2,46% (2,61% in 2017)
  • New business volumes declined by 1% to R110 billion (in line with 2017 in constant currency)
  • Net fund inflows of R17,2 billion compared to R18,9 billion in 2017

Group Equity Value

  • Group Equity Value per share of R60.90
  • Annualised Return on Group Equity Value per share of 13,7%
  • Adjusted annualised Return on Group Equity Value per share of 18,2%; exceeding target of 13%

Capital Management

  • Executing on our African strategy
    • Acquisition of remaining 53% stake in Saham Finances awaiting certain regulatory approvals, anticipated before end 2018
    • R5,5 billion raised at favourable share price to de-risk transaction
    • Discretionary capital of R9,9 billion at 30 June 2018, committed to Saham Finances acquisition
    • Planned 5% BBBEE share issuance will provide remainder of funding requirement and restore discretionary capital to appropriate level
  • Sanlam Group SAM cover ratio of 2,3 times; Sanlam Life Insurance Limited SAM cover ratio for covered business of 2,3 times
Sanlam Life Insurance is a licensed financial service provider.
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