Old Mutual Group Announces Kes327 Million Profit After Tax in First Half of 2024

 Old Mutual Holdings PLC has today announced a profit after tax of Kes327 million for the first half of 2024. This marks a remarkable turnaround from the Kes195 million loss recorded during the same period last year.

The substantial improvement is largely attributed to a significant reduction in finance costs, which fell from Kes1.8 billion to Kes529 million. This reduction followed the conversion of shareholder borrowing to equity in 2023 which is awaiting all the necessary regulatory approvals. Additionally, the company benefited from a substantial improvement in its effective tax rate, which decreased by over half of its previous value — from 150 percent to 70 percent.

Despite a 27 percent decline in operating profit before financing costs, from Kes2.2 billion in the first half of 2023 to Kes1.6 billion by June 30, 2024, the company’s financial performance remained positive. The decline was primarily due to an increase in medical and flooding claims in Kenya and higher reinsurance expenses in Uganda.

The Group experienced a Kes1.1 billion decrease in other comprehensive income, driven by the translation effects of foreign currency denominated subsidiaries into Kenya shillings, following the strengthening of the Kenya shilling. This currency translation adjustment led to a reduction in the consolidated net assets of the Group by Kes873 million.

Looking ahead, the company is optimistic about the second half of the year, where it is set to implement a robust strategy focusing on product and technological innovation to drive growth. As East Africa’s market leader in health insurance, cybercrime protection, alternative investments, and multi-currency unit trusts, Old Mutual continues to expand its reach with 1.9 million customers. This growth is bolstered by strategic bancassurance partnerships, increased broker business, and enhanced multinational corporation propositions.

“Despite the challenges we faced in the first half of the year, we are confident that our strategic initiatives and innovative approach will position us for a strong performance in the coming months,” said Arthur Oginga, the Group’s Chief Executive Officer. 

“We remain committed to the delivery of value to our customers and stakeholders, anticipating a GDP growth and easing inflation across our markets[MM1] .”

Old Mutual’s leadership in innovation was recognized in the period under review, winning the Best Practice Innovation Award at the Association of Kenyan Insurers (AKI) Awards in March. The award recognized the Group’s ongoing commitment to pioneering solutions in Life Assurance.

The firm was also ranked third best in the highly competitive General Insurance Company of the Year category, recognizing its dedication to excellence and customer-centricity. This was in addition to multiple top awards in the individual and advisor categories. Separately, Brand Finance, a respected brand valuation consultancy, named Old Mutual the strongest insurance brand globally, underscoring its strong market presence and reputation for reliability.

Meanwhile, the Group continued its leadership in knowledge sharing through the monthly Old Mutual Financial Services Monitor, which provides invaluable insights and analysis for driving informed decision-making and strategic growth in the financial sector.

Moreover, the Old Mutual Business Roundtable was unveiled in June as a platform for collaboration and growth among small and medium-sized enterprises (SMEs) across East Africa. The strategic network brings together SME owners, investors, financial institutions, professional associations, and industry experts to create opportunities for mutual advancement.