Momentum reports profit growth and Covid-19 recovery.
Listed financial services group Momentum Metropolitan on Monday (30 May), reported a 26% rise in operating profit for the nine months ended March 2022, to R1.74 billion, supported by good earnings growth in Momentum Life, Momentum Corporate, Momentum Metropolitan Health and Guardrisk.
The group saw normalised headline earnings at 46% higher than the comparative period. This growth in earnings was supported by less severe Covid-19 impact on earnings, particularly for Momentum Corporate which experienced a significant turnaround, it said.
New business volumes, as measured by the present value of new business premiums (PVNBP), increased 16% from the prior period to R54.5 billion. New business growth was driven by a strong performance from Momentum Investments, Metropolitan Life and Momentum Corporate.
Net mortality profits for the quarter of R100 million resulted in nine-month losses of R278 million (net of reinsurance and tax) – an improvement from the net mortality losses of R378 million reported for the first six months of the financial year.
The group's investment return more than doubled compared to the prior period to R852 million, mainly aided by the general recovery of investment markets, fair value gains from the revaluation of the Group's investment in venture capital funds, and foreign exchange gains on foreign currency-based assets.
Headline earnings per share increased by 59% from 99.7 cents to 158.3 cents and earnings per share improved by 6% from 108.0 cents to 114.9 cents.
Return on equity (ROE) for the third quarter was 18.2%, up from 11.7% in the prior period. This increase follows the group’s earnings improvement.
"We are encouraged by the resilience of the Group's operational performance during a period of challenging economic conditions. The group's robust levels of capital and liquidity enable our portfolio of businesses to focus on delivering on the strategic objectives of our reinvent and grow strategy. These include various digital transformation-related initiatives, and efforts to improve our capital efficiency."