Old Mutual Ltd warned on Wednesday that its earnings for the first half of 2023 might fall as it battled against tough operating environment.
The Anglo-South African financial services firm guides for earnings per share of between 86.0 rand cents and 107.4 cents for the six months that ended June 30, compared to 106.8 cents a year earlier.
Headline EPS is expected to be between 3,884 cents and 4,834 cents from 4,749 cents.
Shares in Old Mutual shed 6.5% to ZAR11.93 on Wednesday morning in Johannesburg. In London, they slid 6.3% to 50.20 pence.
Old Mutual estimates adjusted headline earnings to be above 20% relative to the comparative period due to an increase in shareholder investment return as a result of increased interest rates and a recovery in equity markets.
Headline earnings are higher than adjusted headline earnings, as adjusted headline earnings exclude earnings from operations in Zimbabwe and adjustments for accounting mismatches.
Accounting mismatches include hedging mismatch losses arising from the transition of the guaranteed product related hedging programmes.
The financial services group expects results from operations to be within the range of negative 7% to positive 13% due to good operational performance which was dampened by continued “adverse persistency” with short-term “persistency provisions” raised in its Mass & Foundation Cluster segment.
Old Mutual expects to release its interim financial results on September 27.