Sanlam sees higher H1 profit

Posted 18 August 2006 @ 12:56 pm EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - South Africa's second-biggest insurance group Sanlam said it expects first-half headline earnings per share to increase as much as 38 percent, driven by new business and strong equity markets.

Sanlam said on Friday that headline EPS -- the key profit measure in South Africa which excludes non-trading, capital and some extraordinary items -- are expected to be 33-38 percent up on the year-ago period.

"Strong growth in new business volumes and a sound operational performance, coupled with favourable South African equity markets during the reporting period, contributed to overall satisfactory group results for the first six months of 2006," Sanlam said.

Shares in Sanlam were 1 percent firmer at 15.65 rand by 0748 GMT, outperforming the JSE Securities Exchange's blue-chip Top-40 index which was flat.

But the group said core earnings would be "marginally higher" than the comparable period in 2005. Sanlam defines core earnings as the net result from financial services and net investment income earned on the shareholders' fund excluding certain items that may cause volatility in headline earnings.

Sanlam said headline earnings would increase 13-18 percent, but headline EPS growth would exceed that level after the company bought back its own shares.

The group, flush with cash after selling its stake in retail bank Absa to Britain's Barclays Plc last year, has spent over 5 billion rand since 2005 on share buybacks.