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Trading statement in terms of the JSE Listings Requirements
MMI Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MMI
NSX share code: MIM
ISIN: ZAE000149902
("MMI" or "the company")
Trading statement in terms of the JSE Listings Requirements
Shareholders are advised that the core headline earnings per share, the
group’s main earnings measure to monitor the operational performance of
the group, are expected to be down by between 0 and 10 percent for the six
month period. Core headline earnings continue to be affected by weak
underwriting experience on group disability business (approximately R60m
lower than in prior period) and by decline in health administration
operating earnings following the loss of two large clients subsequent to
1H16 reporting period (approximately R70m lower than in prior period). The
weak investment return on policyholder assets has also negatively affected
the growth in asset-based fee income across the group. Persistency remains
broadly in line with actuarial assumptions whereas retail risk experience
remains ahead of actuarial assumptions. MMI remains well capitalised at 31
December 2016.
Shareholders are further advised that the group's interim period basic
earnings per share are expected to be between 59 cents and 69 cents
compared to 98.7 cents, a decrease of between 30 and 40 percent to the
comparative period. Basic headline earnings per share are expected to be
between 59 cents and 68 cents compared to 91.3 cents, showing a decrease
of between 25 and 35 percent on the comparative period results.
The difference between the expected decline in core headline earnings and
in basic earnings is largely driven by two items. Firstly, a significant
(approximately R130m) decline in level of fair value gains earned on
shareholders’ investment portfolio. The decline in fair value gains
includes the impact of currency movements on foreign assets over the two
relevant time periods. Secondly, there was a material (approximately
R140m) year-on-year change in earnings arising from the technical IFRS
treatment of MMI shares held in policyholder funds as treasury shares.
Note that MMI excludes fair value gains, movement in value of MMI shares
held in policyholder funds, investment variances and non-recurring items
from core headline earnings whereas basic earnings include all these non-
operational items.
The financial information on which this trading statement is based has not
been reviewed and reported on by MMI's external auditors. MMI will be
releasing interim results for the six months ending 31 December 2016 on 2
March 2017.
Centurion
20 February 2017
Sponsor:
Merrill Lynch South Africa (Pty) Ltd
Date: 20/02/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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