Sanlam interim results June 2018
Net income for the interim period decreased to R44.033 billion (2017: R47.289 billion), net operating result increased to R6.726 billion (2017: R6.547 billion), profit for the period attributable to shareholders' fund rose to R5.050 billion (2017: R4.867 billion), while headline earnings per share grew to 251 cents per share (2017: 227.7 cents per share).
No interim dividend declared in line with Group policy.
Economic growth prospects in our key markets are not expected to improve for the remainder of the year and will continue to impact on our ability to accelerate organic growth. Structural growth and new initiatives such as the Capitec Bank agreements should, however, support operational performance in the second half of the year. Particularly pleasing is the conclusion of investment-related mandates of R5 billion by Sanlam Corporate in July 2018, which will make a marked contribution to VNB and new business volumes. On the negative side, SI received notice of an R8 billion outflow of low margin index-tracking funds managed on an outsourced basis. We continue to attract flows into the Satrix index-tracking funds and the impact of the withdrawal on profitability should therefore be minimal. Focus also remains on addressing the few areas within the wider Group that failed to deliver to target in the first six months, so as to get them back on track for the financial year.
Shareholders need to be aware of the impact that the level of interest rates and financial market returns and volatility have on earnings and GEV. Relative movements in these elements may have a major impact on the growth in normalised headline earnings, VNB and GEV to be reported for the 2018 financial year.
We will continue to diligently execute on the strategic priorities identified in the Group's 2017 Integrated Report.