Metropolitan sees lower earnings
March 10, 2010
Metropolitan Holdings Financial Services Group on Wednesday reported diluted core headline earnings per share for the year ended December 2009 of 141 cents per share, a decline of 7 percent over 2008's 151 cents.
Metropolitan declared a final dividend of 60 cents per share, 9 percent higher than the year-end declaration in 2008.
The group said the investment markets remained extremely turbulent throughout the year and long bond interest rates increased further. Increased inflation and extensive job losses put pressure on our clients' disposable income, as well as on the group's capital and operating profits during the year.
The general economic slow-down affected growth in operating profit across the group.
Despite severe pressure on cash flows from clients as a result of the recession, net inflows of R1.5 billion were recorded by the group and total new recurring premium business to the value of R1.159 billion was written in 2009, while single premium business amounted to R3.422 billion.
The value of the group's new insurance business for the year was R119 million."We are particularly pleased with our success in monitoring and managing our equity market exposure, given the roller-coaster ride that was 2009," said Wilhelm van Zyl, group chief executive.
"Dynamic asset allocation and capital protection strategies such as hedging, together with other de-risking activities, enabled us not only to maintain adequate levels of capital but also to strengthen our balance sheet in the face of unprecedented equity market volatility."
With its statutory capital adequacy requirement (CAR) covered 3.7 times (2008: 3.1 times) at group level and 2.8 times (2008: 2.0 times) at life company level, Metropolitan ended 2009 in an even healthier capital position than it began the year, a reassuring achievement in the light of the market turbulence experienced throughout the year.
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