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Trading statement for the 12 months ended 30 June 2020
MOMENTUM METROPOLITAN HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2000/031756/06
ISIN code: ZAE000269890
JSE Share Code: MTM
A2X Share Code: MTM
NSX Share Code: MMT
(“Momentum Metropolitan” or “the Group”)
MOMENTUM METROPOLITAN LIFE LIMITED
Incorporated in the Republic of South Africa
Registration number: 1904/002186/06
Company code: MMIG
Trading statement for the 12 months ended 30 June 2020
Momentum Metropolitan is currently in the process of finalising its results for the 12 months ended
30 June 2020, which will be released on 9 September 2020. Pursuant to paragraph 3.4(b) of the JSE
Limited Listings Requirements, shareholders are advised that the Group's earnings per share, headline
earnings per share and diluted normalised headline earnings per share are expected to be within the
ranges set out below:
F2020 F2019
% change
(cents) (cents)
Earnings per share 8 to 38 153 -75% to -95%
Headline earnings per share 59 to 92 168 -45% to -65%
Diluted normalised headline earnings per share 71 to 111 203 -45% to -65%
When Momentum Metropolitan reported results for the nine months to 31 March 2020, it was noted that
the impact of the Covid-19 pandemic on the investment markets in South Africa had a significant impact
on the Group’s financial results. The partial recovery during the last quarter of investment market losses
that were reported in 3Q2020, was not sufficient to offset the impact of the tough operating conditions
created by the Covid-19 pandemic, including the need to raise significant additional reserves for
potential Covid-19 related claims and other adverse experience. The full year results will therefore
reflect a decline in diluted normalised headline earnings in the South African retail and corporate life
insurance operations, as well as the Shareholder segment. The Group’s earnings per share, headline
earnings per share and diluted normalised headline earnings per share, are consequently expected to
decline as outlined in the table above.
The Group has considered the likely impact of the Covid-19 pandemic and the related decline in
economic conditions and outlook, as well as expected policyholder behaviour. It has reviewed recent
claims experience, publicly available models that project infection and mortality rates of Covid-19 and
observed data from relief options that clients have exercised in the preceding three months. The
expected impact of these items on the applicable mortality, disability and termination assumptions used
in the valuation basis of the life insurance operations of the Group have been considered, as well as
the impact of claims on non-life insurance business in Guardrisk. The overall impact is expected to be
a reduction in the Group’s earnings, headline earnings and diluted normalised headline earnings for the
year of R1.3 billion (before-tax) and R1.0 billion (after-tax).
In addition to these factors, earnings per share are expected to be further negatively impacted by an
impairment on owner-occupied property of R0.5 billion, which can largely be attributed to property
valuations in Sandton, as well as a R0.2 billion write-off to goodwill of the non-life insurance operations.
Diluted normalised headline earnings adjust the standard JSE definition of headline earnings for the
dilutive impact of finance costs related to preference shares that can be converted into ordinary shares
of the Group, the impact of treasury shares, the amortisation of intangible assets arising from business
combinations and BEE costs. The adjustment for the impact of treasury shares removes mismatches
that might arise from elimination of treasury shares (potential mismatches that are peculiar to financial
institutions that invest in their own securities on behalf of clients). The definition of diluted normalised
headline earnings remains unchanged.
The full financial and operating results for the 12 months are expected to be released on Wednesday,
9 September 2020 at approximately 7:30 via SENS, followed by a live webcast at 11:00. Pre-registration
for the webcast is required, which can be accessed at https://www.corpcam.com/MM09092020. In
addition, the announcement will be broadcast live on Business Day TV, DSTV Channel 412.
Centurion
17 August 2020
The information in this trading statement has not been reviewed and reported on by Momentum
Metropolitan’s external auditors.
Equity sponsor
Merrill Lynch SA (Pty) Ltd
Debt sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 17-08-2020 07:05:00
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