SENS-AI
OMU Trading Statement Neutral

OLD MUTUAL LIMITED - Old Mutual Voluntary Operating Update and Trading Statement for the Six Months Ended 30 June 2026

Old Mutual Limited
Full analysis

What this filing means

A result where the operating engine is running well but the primary profit metric is guided sharply lower. Old Mutual expects adjusted headline earnings per share — its stated primary profit metric — to fall 22% to 32% to 65.7–75.3 cents, driven by lower shareholder investment returns amid Middle East-driven risk-off conditions. The offset is genuine operational strength — life APE sales up 21%, value of new business up 32%, and results from operations growing 2% to 12% — but these do not reverse the directional read on the core metric.

Old Mutual's core insurance and savings businesses are growing well — more people are buying policies and new business is more profitable. But the company's own investment portfolio lost value because global markets fell sharply on Middle East conflict fears, dragging down the headline profit number. The adjusted HEPS figure — the company's own preferred profit measure — falls by up to 32%, which is a material deterioration even with the operational offsets.

Bull case

  • Value of new business increased 32% to R569m with margin expanding 10bps to 1.4%, reflecting a more profitable new business mix across Wealth Management, Corporate and Africa Regions.
  • Results from operations — the primary measure of operating business performance — is expected to grow 2% to 12%, driven by stronger revenue in Wealth Management and Old Mutual Investments, supported by a higher average base of assets under management and administration, as well as lower central costs.

Bear case

  • Adjusted HEPS, the Group's stated primary profit metric, is guided down 22–32% to 65.7–75.3 cents from 96.6 cents — a material decline in the core measure of profitability.
  • Adjusted headline earnings is guided down 25–35% to R2,733m–R3,153m from R4,204m, driven by lower shareholder investment returns following the performance of equity and bond indices.
  • Net underwriting margin at Old Mutual Insure compressed 210bps to 7.6% from 9.7%, a sharp year-on-year step down, despite remaining at the upper end of the 5%–8% medium-term target range.
  • No segmental profit breakdown is disclosed — only group-level ranges mask where the earnings weakness sits.
  • Heps vs normalised: Adjusted headline earnings is explicitly the Group's primary profit metric (A3) yet falls 22-32%; HEPS (-6% to +4%) is distorted by strong Zimbabwe performance excluded from adjusted HEPS. The economic read should anchor on the primary metric, which is sharply negative, not the flattering HEPS.
View original SENS announcement

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

The dominant signal is the 22–32% decline in adjusted HEPS, the group's primary profit metric, attributed to exogenous market weakness rather than operational failure. The operating performance — 21% growth in life APE sales, 32% growth in value of new business, and results from operations expanding 2–12% — is genuinely constructive but does not offset a figure that is being cut by a third. The adjusted HEPS decline and 25–35% fall in adjusted headline earnings are material enough that even acknowledging the investment-return attribution, the directional read is Bearish. So what: the operating story is intact, but the market still needs the 8 September results to quantify the Zimbabwe contribution and show whether the investment drag is reversing.

The 8 September interim results are where the market will test the Zimbabwe contribution, the investment-return drag reversal, and whether the adjusted HEPS range lands at the upper or lower end.

Evidence from the filing

  • Adjusted HEPS, the Group's primary profit metric, is guided down 22–32% to 65.7–75.3c from 96.6c.

    “Adjusted headline earnings per share (cents) — 32% to 22% — 65.7 to 75.3 — 96.6”

  • Value of new business increased 32% to R569m with margin expanding 10bps to 1.4%, reflecting a more profitable new business mix.

    “Value of new business — 569 — 432 — 32%”

  • Results from operations is the primary measure of operating business performance and is expected to grow 2% to 12%.

    “Results from operations is the primary measure of the operating business performance of the Group's segments”

  • The decline in adjusted headline earnings was driven by lower shareholder investment returns following equity and bond index performance.

    “The decrease in adjusted headline earnings was driven by lower shareholder investment returns compared to the prior period”

  • Sharp risk-off conditions from geopolitical conflicts negatively impacted equity and bond performance.

    “sharp risk-off conditions driven by ongoing geopolitical conflicts in the Middle East which have negatively impacted equity and bond performance”
Category
Trading Statement
Event posture
No Edge
Published
Aug 31, 2026

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