Old Mutual Third-Quarter Sales Drop 10% on Europe Turmoil
Old Mutual Plc (OML), the U.K.’s third- biggest insurer, said third-quarter revenue fell 10 percent as the euro area’s debt crisis eroded consumer demand and the British economy struggled to emerge from a recession.
Total covered sales slumped to 278 million pounds ($446 million) from 308 million pounds a year earlier, London-based Old Mutual said in a statement today. That beat the 275 million- pound estimate of 14 analysts surveyed by the company.
“U.K. savings trends remain depressed by low consumer confidence and pressure on household finances,” Chief Executive Officer Julian Roberts said in a statement released in London and Johannesburg today.
Old Mutual, which is Africa’s largest insurer, operates in Europe, the U.K. and South Africa. CEO Roberts and his team created a three-year strategy to reduce debt, cut costs and achieve a return on equity of 15 percent. While the sale of Nedbank Group Ltd. (NED) and the initial public offering of its U.S. asset management unit fell through, the insurer has sold U.S. Life and part of its Skandia operations.
“In the short term, the sector will continue to be challenged by external factors,” Roberts said.
The company’s shares dropped 1.3 percent to 23.65 rand at the close in Johannesburg and 3 percent to 168.8 pence in London trading. Old Mutual is the fourth-best performing stock on the eight-member FTSE 350 Life Insurance Index (F3LIFE) this year, having gained 24 percent.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com