By Fred Odhiambo
Old Mutual Holdings PLC has recorded a KES 0.2 billion profit before tax for the half-year period ended June 30, 2023. The profit, is an improvement from a loss before tax of Kes 0.9 billion recorded within the same review period in 2022.
The Old Mutual Group in East Africa comprises Old Mutual Holdings PLC and its subsidiaries & Old Mutual East Africa Holdings Group Limited and its subsidiaries, which include, Old Mutual Investment Group, and Faulu Microfinance Bank. The Group, which operates an integrated financial services business model, is one of the largest in East Africa and offers customers insurance, investment, banking, and savings solutions.
This is driven by profitable growth in revenues, which increased by Kes 1.8 billion (12%), coupled with increased investment income from financial assets and investment properties but partially countered by the significant increase in finance costs.
Finance costs on borrowings were up 96% per cent over the same period in 2022 due to increased interest rates and forex losses on the portion of the US dollar-denominated debt. The Libor, on which basis interest is determined for US dollar loans, has moved from 0.59% in June 2022 to 5% in June 2023, while the Kenya Shilling depreciated by 14% against the US Dollar over the same period.
Operating profits before finance costs are Kes 2.1 billion in 2023 compared to Kes 0.1 billion in 2022.
Releasing the results, Old Mutual Group EA Chief Executive Officer Arthur Oginga expressed his optimism about the company’s resurgence, citing the anticipated enhancement of the East African operational landscape due to a decreasing inflation rate and a positive GDP growth projection for the year.
“Our strategy is focused on delivering our integrated financial services offering to meet all our customer’s financial needs under one roof. This will enhance our customer experience and improve productivity on our distribution channels in our various markets,” said Arthur Oginga.
For the remainder of the year, the group is positive about the region’s economic outlook but carefully notes potential risks from rising Global Oil prices and adverse effects of the El Nino weather phenomenon.
The Old Mutual Group is part of Old Mutual Limited (OML). The Group operates in Kenya, Uganda, South Sudan, Rwanda, and Tanzania. In Kenya, where it has served customers for over 100 years, the Old Mutual Group has the leading short-term insurance business, an investment business with over Kshs 252B in Funds Under Management, and a fast-growing Life Assurance business.
It has established diverse distribution networks via brokers, an agency force, direct sales, bancassurance, and digital channels.
In South Sudan, the Group has the most prominent short-term insurance business. In Uganda, the Group has the largest Life Assurance Business, the largest Asset Management Business with over 67% Market share, and the second-largest short-term business in the country.
Old Mutual also has short-term insurance businesses in Rwanda and Tanzania. Regionally the Group has a Kshs. 20B property portfolio with iconic buildings; Equatoria Tower in South Sudan, Nakawa Business Park in Uganda, and Old Mutual Tower in Nairobi.