Busy day: Standard Bank, Sanlam and MTN deliver 2018 results

The banking, insurance and telecoms companies have released their annual financial year-end results.

A six percent headline earnings decline for Sanlam and increase for Standard Bank, while MTN reports 85.2 percent increase. 

South Africa’s biggest insurer Sanlam reported a six percent decline in headline earnings, while diluted headline earnings per share declined eight percent. 

The company stated that the negative investment market returns and higher interest rates in a number of markets where the group operates had a negative impact on growth in operating earnings and some other key performance indicators. This was aggravated by weak economic growth in South Africa and Namibia and internal currency devaluations in Angola, Nigeria and Zimbabwe.

However, it’s not all bad news. The highlight features of their 2018 annual results included: 

  • Net result from financial services increased by 4 percent. 
  • Net value of new covered business up 8 percent. 
  • Net fund inflows of R42 billion. 
  • Adjusted Return on Group Equity Value per share of 19.4 percent exceeded the target of 13 percent. 
  • Dividend per share of 312 cents, up 8 percent. 

Sanlam Group Chief Executive Officer, Mr Ian Kirk said: 

“We are satisfied with our performance in a challenging operating environment. We will continue to focus on managing operations prudently and diligently executing on our strategy to deliver sustainable value to all our stakeholders. The integration of SAHAM Finances is progressing well. In addition, Sanlam shareholders approved the package of B-BBEE transactions, including an equity raising, at the extraordinary general meeting held on 12 December 2018. Our plan to implement these transactions this year remains on track.”

Telecommunications firm MTN delivered very “encouraging” performance as they reach eight quarters of continued operational improvements with an impressive 85.2 percent increase in headline earnings.

According to MTN group president and CEO Rob Shuter, the company met its targets for growth in service revenue and EBITDA, as well as those on reducing capex intensity and improving holdco leverage. 

“We continue to benefit from the demographic dividend in the countries in which we operate and, while the markets remain challenging, we continue to target service revenue growth ahead of inflation. In the year we made good progress in resolving key regulatory challenges in markets including Benin, Cameroon and Nigeria. Managing regulatory issues and improving relationships and risk management remains key focus areas for the group, and we will continue to strengthen these areas in 2019,” Rob said.

Growth in service revenue accelerated, the margin on EBITDA increased, and voice and data revenues continued to expand.

The highlights include: 

  • Voice revenue increased by 7.3 percent.
  • Group data revenue expanded by 22 percent. 
  • Fintech revenue increased 46.8 percent. 

Standard Bank said that it was able to deliver sustainable earnings growth and improved returns. 

“The bank had delivered sustainable earnings and improved its return on equity to 18 percent, underpinned by the strength and breadth of its franchise,” Standard Bank CEO Sim Tshabalala (pictured) said.

It reported a six percent increase in headline earnings, while headline earnings per share increased by seven percent for the period. The dividend per share at 970 increased by seven percent. 

The bank said that a weaker-than-expected South African economy, slow progress in policy changes and higher taxes weighed on confidence and demand for credit, with loans in its retail and business bank growing just 3 percent at home.