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Cape Town - Sanlam's latest results can be seen as reasonable and resilient against the background of a very difficult current economic climate, the company's financial director Heinie Werth told Fin24 on Thursday.
He is also pleased with the results when compared to how Sanlam's competitors did.
Factors at play during the reporting period, in his view, include the run-up to the ANC's leadership election in December, the impact of SA's credit ratings downgrades, the volatile rand and a flat stock market. All of these are causing a lot of uncertainty.
Earlier on Thursday Fin24 reported that Sanlam is remaining upbeat despite recording an 18% drop in headline earnings in its six months to end-June, compared to the previous period in 2016.
While normalised headline earnings saw a 5% rise to R4.481bn, deferred tax assets of R1.275bn - in respect of certain assessed losses in the policyholder funds, after the introduction of a separate Risk Policy Fund for South African insurance companies during 2016 - saw headline earnings fall 18% to R4.565bn from R5.597bn.
One trend he has noticed is that people with higher incomes are "not really moving their money around" at the moment. And when the stock market is flat, then the income from fees is also under pressure.
"The biggest impact on our results has been the rand, which was stronger than a year ago. Other issues that impacted our results include the flooding in Cape Town and the Knysna fires," he said.
For Werth highlights include a growth in the value of business in the low and middle market in SA.
"Our performance is still resilient, because of our good track record over the years and due to our stable, experienced staff," said Werth.
"We just keep our heads down and do what we know best to do."
As for the performance outside SA, he describes it as a mixed bag.
"If one takes the impact of the stronger rand out, then the performance outside SA was still good, although we lost market share in Namibia and Botswana," said Werth.
Business in Malaysia is not yet where Sanlam would like it to be, he added.
"Our strategy remains focused on SA, then Africa and then the rest. In Africa we are looking at synergy projects and in Nigeria our business is doing well," he said.
Future
As for the future, Werth foresees that the volatility of the rand will continue to make an impact as well as the coming months until the ANC leadership election in December and uncertainty regarding further possible ratings downgrades.
"So we see the next six to 12 months as a difficult period. We are confident about India and as for SA, we are confident that our base is sound and that we will do better relative to our competition," said Werth.
By late afternoon Sanlam's share price traded down 0.79% at R68.
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