| Thu 30 Jul 2009, 7:30 | | LBH - Liberty Holdings - Trading statement in terms of the JSE Listings |
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LBH
LBH
LBH - Liberty Holdings - Trading statement in terms of the JSE Listings
Requirements
Liberty Holdings Limited
(Liberty Holdings)
Registration number 1968/002095/06
Incorporated in the Republic of South Africa
Share code: LBH
ISIN code: ZAE000127148
TRADING STATEMENT IN TERMS OF THE JSE LISTINGS REQUIREMENTS
Liberty Holdings Limited`s (the group`s) results for the six months ended 30
June 2009 will be published on 6 August 2009. This trading statement is issued
in terms of the JSE Listings Requirements.
In its first quarter operating update, the group reported market risk losses
arising from interest rate and equity exposures estimated at R750m. The combined
impact of changes in equity markets and interest rates during the second quarter
did not significantly affect this result. However, the stronger Rand since the
end of the first quarter led to negative mark-to-market adjustments on the
group`s foreign currency investments of approximately R530m.
The deterioration in economic conditions has been worse than anticipated and
this has contributed to life operations experiencing higher policy lapses. Long
term lapse assumptions have therefore been increased, while the prolonged
weakness in the economy has also been recognised through an adjustment to short
term lapse assumptions, together reducing earnings by approximately R690m. Other
life assurance experience is, however, broadly in line with actuarial
assumptions. Life retail cash inflows have shown strong improvement, with
indexed new business sales being marginally ahead of the comparable six months
in 2008, albeit at lower margins.
Cost control has remained effective during the period.
As a result of the above factors, the group expects to report a total and
headline loss for the six months ended 30 June 2009 of between R1 100m and R1
300m and a basic and headline loss per share of between 434 cents and 521 cents.
The group`s BEE normalised embedded value per share, as a result of the first
half loss, higher long term interest rates and increased lapse assumptions, is
expected to be between R78 and R80.
The capital adequacy level of the group`s main life license, Liberty Group
Limited, remains strong at 2.5 times the required cover. The reduced market risk
now being carried by the group is also reflected in an improved capital position
in terms of the group`s economic capital calculation.
The information contained in this announcement has not been reviewed or audited
by the company`s external auditors.
Note 1
As defined in the 2008 annual report, Black Economic Empowerment (BEE)
normalised embedded value per share includes dividends received on the group`s
BEE preference shares and also includes the reinstatement of the number of
shares in issue relating to the group`s BEE transaction. This measure reflects
the economic reality of the transaction as opposed to the required technical
accounting treatment that reflects the BEE transaction effectively as a share
buy back.
Johannesburg
30 July 2009
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 30/07/2009 07:30:02 Produced by the JSE SENS Department.
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