RMI holds back on dividend as insurance


RMI holds back on dividend as insurance


Published Date: 2020-09-28 | Source: Stephen Gunnion | Author: Stephen Gunnion

RMI holds back on dividend as insurance

The investment holding company says its position will be dynamically assessed over the coming months.

Rand Merchant Investments (RMI) has reported a sharp decline in full-year earnings after its underlying investee companies made substantial provisions due to Covid-19. It's declined to pay a final dividend.

The financial services investment holding company owns stakes in Momentum Metropolitan Holdings (MMH), Discovery and London-listed insurer Hastings. It also has a number of unlisted investments, including a majority stake in OUTsurance. Its portfolio is worth R44.7 billion.

For the year to end-June, headline earnings fell 49% to R1.96 billion and normalised earnings declined by 24% to R3.09 billion, led by a 51% decline in MMH's normalised earnings and a 26% decline in Discovery's. The normalised figures exclude the impact of non-recurring items and accounting anomalies.

Discovery was impacted by a R3.4 billion provision for future claims and lapses as a result of the pandemic, while MMH set aside R983 million and was further affected by market-related losses of R975 million due to volatile markets in the third quarter of the year. OUTsurance, Hastings and its other unlisted investments were affected to a lesser degree.

While RMI will receive dividends from OUTsurance and Hastings, it said Discovery and MMH held back on dividends for the year. It has decided not to declare a final dividend due to the heightened medium-term economic and insurance-related uncertainty that have resulted from Covid-19. It said the position would be dynamically assessed over the coming months.

The company's shares fell 3.3% to R28.19 on Friday.


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