Empowerment deal affects Sanlam’s earnings


Empowerment deal affects Sanlam’s earnings


Published Date: 2019-08-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Empowerment deal affects Sanlam’s earnings

The life assurer says first-half earnings will decline by up to 35% due to once-off charges linked to a recent empowerment deal.

Sanlam says it will report a fall in first-half earnings due to a number of one-off factors, including charges linked to a recent empowerment transaction.

In a trading statement, the life assurer and financial services group said earnings and headline earnings per share for the six months to end-June were likely to be between 25% and 35% lower than those reported a year ago. Excluding the charges, it said first-half profit would be between 8% and 18% higher, reflecting a solid underlying operational performance.

Last October, Sanlam said it would sell 5% of its issued shares to new and existing black shareholders in a top-up broad-based black economic empowerment deal. Existing anchor empowerment shareholder Ubuntu-Botho was in line to receive a fifth of the shares, with employees, business partners, women and youth groupings and broad-based groups receiving the balance under a master trust.

Under International Financial Reporting Standards, it recognised a once-off expense of R1.7 billion due to shares issued under the empowerment deal. On top of that it booked an amortisation charge of R200 million related to the first-time consolidation of Saham Finances and Nucleus as group subsidiaries.

Its results are scheduled for release on 5 September. Its shares closed unchanged at R69.90.


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