Momentum’s mixed bag of results

Momentum Metropolitan reported mixed results for the 2023 financial year, as profit and earnings grew in some segments while others saw a significant decline.

Momentum Metropolitan released its results for the year ended 30 June 2023 today, which revealed mixed results.

The company’s basic earnings grew by 17%, headline earnings per share grew by 5%, and earnings per share increased by 20%.

The company’s normalised headline earnings reached a historic high for the company, exceeding R5 billion for the first time.

The company said its results were positively impacted by improved mortality experience due to the modest impact of Covid-19 during the current year and a strong improvement in investment variances from favourable shifts in yield curves. 

Operating profit grew by 31% to R4.42 billion, from R3.36 billion in the prior year, “supported by improved mortality experience and investment variances”. 

However, this growth was dampened by a significant decline in investment performance, which dropped by 35%.

The company said this was mainly a result of a significant fair value gain on the company’s investment in venture capital funds in the previous year, “followed by a modest negative movement in the current year”.

Momentum Life reported a particularly good performance for the year, having grown operating profit by 87%.

Momentum Corporate and Momentum Metropolitan Health also saw operating profit growth in the period of 13% and 35%, respectively.

However, Momentum Investments, Metropolitan Life and Non-life Insurance saw a decline in operating profit for the period.

Momentum Investments reported a 15% decline in operating profit, mainly due to lower mortality profits from annuities and lower new business sales on the Momentum Wealth platform. 

Operating profit in Metropolitan Life was mainly impacted by assumption changes reflecting operating headwinds and a continued deterioration in lapse experience on the protection business. 

Within the Non-life Insurance segment, Momentum Insure was negatively affected by a continuation of high claim ratios given adverse experience and premium increases, which did not mitigate rising claims inflation. 

However, Momentum Metropolitan Africa saw a significantly improved result primarily due to positive investment variances, mortality experience and actuarial basis changes.

The company declared a dividend of 120 cents per share – a 20% increase from the previous year.