Old Mutual today announced its first-half operating profit fell to £782m, down 12% on the same time last year.
The UK and South African life insurer’s European Embedded Value profit was £885m at the corresponding point in 2006, and had been expected to fall to just £850m.
The dip has been attributed to a weakening of the rand and the dollar to the pound.
It wasn’t all doom and gloom, the UK arm of the company, encompassing Skandia and Selestia, recorded healthy results – with an £80m adjusted operating profit, up from £73m.
It also had a 23% increase in life sales and a 13% funds under management increase, to £41bn.
Old Mutual first half life assurance sales climbed 10% to £859m, from £779m; while total funds under management climbed 11% to £263bn from December 2006.
Its interim dividend also increased to 2.3p per share, up from 2.1p last year.
Chief executive Jim Sutcliffe is positive about the company’s results, particularly on the Skandia side.
"Underlying business performance during the first half, driven principally by high quality investment management, resulted in strong net client cash flows and growth in funds under management - the key driver of profitability,” he says.
“During the period we announced the launch of Selestia Investment Solutions… giving financial advisers a single, easy-to-understand market proposition.
“The integration of the two platforms will deliver further revenue synergies above those originally announced and goes live on 15 August 2007.”
Sutcliffe says despite muted group earnings due to the pound’s strengthening against the rand and the dollar, Old Mutual is well placed.
“Our strong capital position and powerful set of international businesses will allow us to grow even if economic conditions continue to be turbulent."
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