MMI’s Full-Year Profit Slumps 25% on Lower Underwriting Returns

  • Core EPS excluding one-time items misses analyst estimates
  • South African insurer to focus on improving efficiencies

MMI Holdings Ltd., a South African insurer, said fiscal full-year profit dropped 25 percent after underwriting slumped and investment returns declined.

Net income fell to 2.14 billion rand ($153 million) in the 12 months through June, from 2.86 billion rand a year earlier, the Johannesburg-based company said in a statement on Wednesday. So-called core earnings per share, which exclude one-time items and other adjustments, fell to 2.03 rand from 2.44 rand a year earlier, missing the 2.24 rand median estimate of four analysts surveyed by Bloomberg.

MMI, formed by the merger of Metropolitan Group Ltd. and Momentum Group Ltd. in 2010, is involved in life insurance, property and casualty cover, savings, investment, healthcare administration, health-risk management and employee benefits. Rivals Sanlam Ltd. and Liberty Holdings Ltd. have also struggled to boost earnings in the past year amid an economic slowdown in South Africa and political wrangling that has shaken markets and dented consumer sentiment.

Growth in new business volumes and profits will “be impacted by many factors in the South African economy, including employment levels and disposable income,” MMI said in the statement. “Taking into account the economic outlook, the group has increased the focus on efficiencies.”

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