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MET
MET
MET / MTD - Metropolitan`s Unaudited Group Results For The Six Months
Ended 30 June 2009
Metropolitan Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MET
NSX share code: MTD
ISIN: ZAE000050456
("Metropolitan" or "the company")
METROPOLITAN HOLDINGS FINANCIAL SERVICES GROUP
UNAUDITED GROUP RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
- Net funds received from clients - R2 billion
- New business recurring premiums - up 11%
- Metropolitan Health group operating profit before tax - up 26%
- Dividend per share maintained
- Group CAR strengthened to 3.2x
- BEE transaction re-financed
REVIEW OF OPERATIONS AND PROSPECTS
Operating environment
The investment markets continued to be extremely turbulent and
unpredictable, long bond interest rates increased once again and
inflation remained above comfortable levels. These factors put
pressure on our clients` disposable income, as well as on the
group`s financial and other operating measures during the period.
Salient features and highlights
- Diluted core headline earnings per share for the half-year were subdued,
decreasing by 12% over 1H08.
- Earnings and headline earnings, which include adjustments for economic and
other market value impacts, were less affected.
- The general economic slow-down affected growth in operating profit across
the group.
- Total recurring new business premium income increased by 11%, with growth
in all three life businesses; the value of group new business, however,
fell 7% to R104 million.
- Investment income after tax on shareholder assets was 10% higher.
- The economic capital required by the group remained reasonably stable
despite a marginal reduction to R4.4 billion, mainly as a result of a
decline in projected economic volatilities.
- The overall capital position of the group improved, resulting in a group
CAR cover of 3.2 times.
- The embedded value per share held up well, only dropping from 1 709 cents
(31 December 2008) to 1 654 cents, a reflection of the final dividend of 55
cents per share paid in April.
- The group`s unbroken record of positive cash flow from clients continued,
with a net inflow of R2 billion being recorded.
Operational overview
Retail
- New recurring premium income was 8% higher, mainly boosted by good sales
through the personal financial adviser channel.
- Single premium new business was down 25% as a result of restrictions on
various third party and other distribution agreements.
- The mix of new business sold during the period changed, with a move from
savings to risk products.
- The increasingly difficult consumer conditions led to a higher propensity
to lapse or surrender life insurance policies. Ongoing focused management
action in this area resulted in better-than-expected overall persistency
experience during the period under review.
- As can be expected in the current economic climate, the direct marketing
business had a negative impact on both operating profit and value of new
business (VNB). This business continues to receive focused attention.
- The retail new business margin increased from 0.7% to 1.0% (present value
of future premiums (PVP) basis). Changes to the commission structures,
together with higher new business expenses, were more than compensated for
by increased new business production and economic assumption changes.
- Operating profit before tax decreased by 5%, dampened by lower average
investment assets, the effects of the worsening economic environment on
certain product lines and new business strain on investment products as a
result of the implementation of the changed commission regulations.
Corporate
- New recurring premium income ended the period up 28%, driven by an increase
in risk premiums.
- In addition, a significant volume of pure administration business was
written on the new Neon product. Including this business on-balance sheet
would have boosted recurring new business by an estimated 38%.
- The new business PVP margin, however, decreased from 1.1% to 0.8%,
reflecting a change in the mix of business written.
- Although the growth in off balance sheet administration business did not
contribute to new business premium income, it did affect the new business
margin as it assisted with the recovery of costs and boosted the value of
new business.
- Risk margins, especially on funeral and disability business, remained under
pressure throughout the period while expenses were firmly under control.
- Operating profit after tax was 25% lower, impacted by lower average
investment levels, the change in the mix of business and reduced risk
profits.
International
- New business recurring premium income, from all seven operations, was
boosted by the performance in the "new" countries and grew by 8% compared
to 1H08.
- The three northern operations all increased their premium income and are
progressing satisfactorily. (NB Next bullet deleted.)
- With the inclusion of all seven operations in the number for the first
time, a reduced new business margin of 1.3% (PVP) was recorded.
- Total operating profit before tax increased by 4%, despite higher start-up
losses in the northern operations and tough conditions in all markets.
Asset management
- The value of new business, comprising collective investment inflows and new
third-party mandates, grew by 5%.
- MetAM delivered good relative investment performance over the period.
- However, operating profit before tax declined by 56% as a result of lower
absolute investment market performance as well as increased staff costs.
Health
- New business flows increased, mostly as a result of the tremendous growth
in membership of the Government Employees Medical Scheme (GEMS).
- Total principal members under administration, including franchise, at the
end of June were in excess of 795 000 (more than two million lives),
confirming MHG`s status as South Africa`s largest administrator of closed
medical schemes.
- As a result of the continued growth in members, together with improved
operational efficiencies attributable to increasing economies of scale,
operating profit before tax increased by 26% compared to 1H08.
- Operating profit after tax was reduced by STC of R13 million on a dividend
paid to Metropolitan Holdings.
Prospects
- Metropolitan continues to create prosperity for Africa`s people by
providing appropriate products that are both accessible and affordable.
- All the businesses are facing opportunities and threats posed by ongoing
changes in the highly regulated environments in which they operate.
- Food and transport inflation, together with rising unemployment, remain the
biggest challenges to the group`s core target market. Further deterioration
in the above factors could curtail new business prospects and possibly
threaten the persistency of the in-force book.
- The board is satisfied that the group remains strategically well
positioned, thanks to its strong focus on client service, product
innovation, business retention, cost containment, diversification and
capital management.
DIRECTORS` STATEMENT
The directors take pleasure in presenting the unaudited interim results of the
Metropolitan Holdings financial services group for the six months ended 30 June
2009.
These results have been prepared in accordance with International Accounting
Standard 34 (IAS34) - Interim financial reporting; guidelines issued by the
Actuarial Society of South Africa; and the disclosure requirements of the JSE
Limited (JSE).
The accounting policies of the group have been applied consistently to all the
periods presented. The preparation of financial statements in accordance with
IFRS requires the use of certain critical accounting estimates as well as the
exercise of managerial judgement in the application of the group`s accounting
policies. Such critical judgements and accounting estimates are disclosed in
detail in the annual financial statements at 31 December 2008 and, with the
exception of the principal economic assumptions, have remained unchanged since
then.
The accounting treatment of certain items has been changed from that disclosed
in June 2008. In finalising the December 2008 annual financial statements,
various refinements were made to the application of IFRS, as disclosed in the
2008 annual report. As a result, certain line items were reclassified in the
statement of financial position at 30 June 2009. Neither shareholder equity nor
earnings were affected.
More information on these restatements and reclassifications is available in the
SENS announcement or on the Metropolitan website, www.metropolitan.co.za.
Corporate activity during year
Metropolitan cancelled 16 million listed ordinary shares that were held at 31
December 2008.
Related parties
There have been no significant changes to the nature of the related party
transactions as described in note 42 of the 2008 annual financial statements.
CORPORATE GOVERNANCE
The board has satisfied itself that appropriate principles of corporate
governance were applied throughout the period under review.
DIRECTORATE CHANGES AND DIRECTORS` SHAREHOLDING
Wiseman Nkuhlu resigned from the board with effect from 17 March 2009. JJ Njeke
was appointed acting chairman. After an association of 20 years with
Metropolitan, Dr Sonn will be retiring as a director on 11 October 2009. The
board extends its grateful thanks for his invaluable contribution. No further
changes have been made to the directorate. All transactions in listed shares
involving directors were disclosed on SENS as required.
CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
The group had no material capital commitments at 30 June 2009. The group is
party to legal proceedings in the normal course of business, and appropriate
provisions are made when losses are expected to materialise.
EVENTS AFTER REPORTING PERIOD
On 26 August 2009 shareholder approval was granted for the refinancing of the
strategic empowerment transaction with Kagiso Trust Investments (Pty) Ltd. No
other material events occurred between the reporting date and the date of
approval of the interim results.
DIVIDEND DECLARATION
Ordinary listed shares
The dividend policy for ordinary listed shares, approved by the directors and
consistent with prior years, is to provide shareholders with stable dividend
growth that reflects expected growth in underlying earnings in the medium term,
while allowing the dividend cover to fluctuate.
An interim dividend of 40.00 cents per ordinary share was declared on
1 September 2009. This dividend is payable to the holders of ordinary shares
recorded in the register of the company at the close of business on Friday, 25
September 2009 and will be paid on Monday, 28 September 2009. The last day to
trade "cum" dividend will be Thursday, 17 September 2009. The shares will trade
"ex" dividend from the start of business on Friday, 18 September 2009. Share
certificates may not be dematerialised or rematerialised between Friday, 18
September and Friday, 25 September 2009, both days inclusive.
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders` bank accounts on payment date. In
the absence of specific mandates, dividend cheques will be posted to
certificated shareholders on or about payment date. Shareholders who have
dematerialised their shares will have their accounts with their CSDP or broker
credited on Monday, 28 September 2009.
Preference share (unlisted) dividend
Dividends of R29 million (14%), R5 million (40 cents per share) and R26 million
(16%) were declared on 1 September 2009 on the A1, A2 and A3 Metropolitan
preference shares respectively, payable on 30 September 2009. The declaration
rates were determined as set out in the company`s articles. These amounts are
included under finance costs in these results.
Signed on behalf of the board
JJ Njeke Acting group chairman
Wilhelm van Zyl Group chief executive
Cape Town
1 September 2009
Directors:
JJ Njeke (acting non-executive group chairman), Wilhelm van Zyl (group chief
executive), Phillip Matlakala (executive director), Preston Speckmann (group
finance director), Fatima Jakoet, Peter Lamprecht, Syd Muller, John Newbury,
Bulelwa Paledi, Andile Sangqu, Marius Smith, Franklin Sonn, Johan van Reenen
Secretary: Bongiwe Gobodo-Mbomvu
Registration number: 2000/031756/06
Registered office: 7 Parc du Cap, Mispel Road, Bellville 7535
JSE code: MET
NSX code: MTD
ISIN NO: ZAE000050456
Transfer secretaries Sponsor
Link Market Services SA Merrill Lynch
(Proprietary) Limited
(Registration number 2000/007239/07)
5th Floor, 11 Diagonal Street,
Johannesburg 2001
P O Box 4844, Johannesburg 2000
Telephone: +27 11 834 2266
E-mail:
info@linkmarketservices.co.za
METROPOLITAN HOLDINGS FINANCIAL SERVICES GROUP
Basis of presentation of financial information
These results have been prepared in accordance with International Accounting
Standard 34 (IAS34) - Interim financial reporting; guidelines issued by the
Actuarial Society of South Africa; and the disclosure requirements of the JSE
Limited (JSE). The accounting policies of the group have been applied
consistently to all periods presented. The preparation of financial statements
in accordance with International Financial Reporting Standards (IFRS) requires
the use of certain critical accounting estimates as well as the exercise of
managerial judgement in the application of the group`s accounting policies. Such
judgement, assumptions and accounting estimates are disclosed in detail in the
annual financial statements for the year ended 31 December 2008, and with the
exception of the principal economic assumptions, have remained unchanged since
then.
Restatement of 2008 results
- Certain policy loans were previously disclosed as loans and receivables
within the financial instruments category. These policy loans (R202
million) together with the related insurance (R158 million) and investment
contract liabilities (R44 million) were derecognised. The opening balances
in June 2008 for insurance (R134 million) and investment (R41 million)
contract liabilities were also restated. This resulted in net insurance
benefits and claims for 2008 increasing by R24 million as only insurance
claims are recorded in the income statement. This had no impact on the
group`s earnings.
- The disclosure of scrip lending fees received was changed from that
disclosed in the June 2008 results. Scrip lending fee income of R5
million, previously disclosed as investment income, has been reclassified
as fee income as this class was considered more appropriate. This had no
impact on the group`s earnings.
- The disclosure of sales remuneration has been reconsidered. Distribution
costs are no longer considered part of sales remuneration and have been
reallocated to other expenses. This resulted in an increase of other
expenses of R67 million for June 2008 (December 2008: R140 million) and a
corresponding decrease in sales remuneration. This had no impact on the
group`s earnings in any of the reporting periods.
- Fee income on certain investment contracts was incorrectly allocated in the
June and December 2008 results. This resulted in a decrease in fee income
of R77 million for June 2008 (December 2008: decrease of R80 million). The
investment and insurance liabilities were also restated for June 2008. This
had no impact on the group`s earnings in any of the reporting periods.
Embedded value
Revised embedded value guidance from the Actuarial Society of South Africa,
which is intended to be materially consistent with the CFO Forum`s European
Embedded Value (EEV) Principles issued in May 2004, became effective for
reporting periods ending on or after 31 December 2008. The disclosed embedded
value results have been prepared in accordance with these new guidelines. The
diluted embedded value at 30 June 2008 has been restated accordingly, (decrease
of R129 million).
Standards and interpretations of published standards effective in 2009 and
relevant to the group
- IAS 1 (Revised) - Presentation of financial statements. The revised
standard prohibits the presentation of non-owner changes in equity in the
statement of changes in equity, requiring all such income and expense items
to be presented separately from owner changes in equity. The group has
therefore prepared a statement of comprehensive income as well as a
statement of changes in equity for the current results.
- The following standards: IFRS 2 (Amendment) - Share-based payments, IFRS 7
(Amendment) - Financial instruments disclosures: Improving disclosures
about financial instruments, IFRIC 16 - Hedges of a net investment in a
foreign operation and AC 503 (Revised) - Accounting for black economic
empowerment transactions had no impact on the group`s earnings.
- The International Accounting Standards Board (IASB) made amendments to
various standards as part of their annual improvements project. These
amendments had no impact on the group`s earnings.
METROPOLITAN HOLDINGS - GROUP RESULTS
CONSOLIDATED STATEMENT OF FINANCIAL 30.06.2009 30.06.2008 31.12.2008
POSITION Rm Rm Rm
ASSETS
Intangible assets 488 525 525
Owner-occupied properties 700 607 678
Property and equipment 197 278 186
Investment properties 3 117 2 790 3 031
Investment in associates 1 365 592 663
Investment in joint venture - 54 35
Employee benefit assets 241 319 248
Financial instrument assets (1) 51 903 62 682 53 692
Insurance and other receivables 1 441 1 425 1 507
Deferred income tax 10 7 12
Reinsurance contracts 230 271 212
Current income tax assets 13 40 14
Cash and cash equivalents 8 971 6 466 8 810
Non-current assets held for sale - 19 -
Total assets 68 676 76 075 69 613
EQUITY
Equity attributable to owners of 5 749 6 527 5 847
the parent
Minority interests 166 131 141
Total equity 5 915 6 658 5 988
LIABILITIES
Insurance contract liabilities
Long-term insurance contracts (2) 32 573 33 048 32 023
Capitation contracts 2 2 2
Financial instrument liabilities
Investment contracts 24 453 28 376 25 209
- with discretionary participation 10 589 13 637 11 278
features (2)
- designated as fair value through 13 864 14 739 13 931
income
Other financial instrument 2 448 3 949 3 119
liabilities (3)
Deferred income tax 118 428 127
Employee benefit obligations 258 246 188
Other payables 2 870 3 368 2 934
Current income tax liabilities 39 - 23
Total liabilities 62 761 69 417 63 625
Total equity and liabilities 68 676 76 075 69 613
(1) Financial instrument assets consist of the following:
Assets designated as fair value through income: R50 002 million
(30.06.2008: R59 629; 31.12.2008: R50 795 million)
Assets held for trading: R822 million (30.06.2008: R1 814 million;
31.12.2008: R1 764 million)
Available-for-sale assets: R5 million (30.06.2008 R7 million; 31.12.2008:
R5 million)
Loans and receivables: R1 074 million (30.06.2008; R1 232 million;
31.12.2008: R1 128 million)
(2) Under IFRS4, the group continues to account for long-term insurance
contracts and investment contracts with discretionary participation
features using SA GAAP.
(3) Other financial instrument liabilities consist of the following:
Liabilities designated as fair value through income: R337 million
(30.06.2008: R391 million; 31.12.2008: R272 million)
Liabilities held for trading: R768 million (30.06.2008: 2 216 million;
31.12.2008: R1 498 million)
Liabilities at amortised cost: R1 343 million (30.06.2008: R1 342 million;
31.12.2008: R1 349 million)
METROPOLITAN HOLDINGS - GROUP RESULTS
STATEMENT OF ACTUARIAL 30.06.2009 30.06.2008 31.12.2008
VALUES OF ASSETS AND Rm Rm Rm
LIABILITIES ON REPORTING
BASIS
Total assets per balance 68 676 76 075 69 613
sheet
Actuarial value of policy (57 026) (61 424) (57 232)
liabilities per balance
sheet
Other liabilities per (5 735) (7 993) (6 393)
balance sheet
Minority interests (166) (131) (141)
Excess - group per 5 749 6 527 5 847
reporting basis
Net assets - other (458) (1 274) (934)
businesses
Excess - long-term 5 291 5 253 4 913
insurance business (4)
LONG-TERM INSURANCE
BUSINESS (4)
Change in excess of long- 378 (462) (802)
term insurance business
(4)
Increase in share capital - (19) (39)
Metropolitan Nigeria (74) - -
Change in other reserves 16 (26) (45)
Dividend paid 77 852 1 053
Total surplus arising 397 345 167
Operating profit 295 357 734
Investment income on 187 157 309
excess
Net realised and fair 70 (42) (329)
value (losses)/gains on
excess
Investment variances (5) 182 (7) (387)
Basis and other changes (337) (262) (197)
Employee benefit assets - 142 37
(6)
Consolidation adjustments 33 45 75
Income tax 168 (1) (170)
expenses/(credits) (7)
Adjustment for finance 24 23 49
costs
Results of long-term 622 412 121
insurance business (4)
Results of other group (48) (15) (277)
businesses
Results of operations per 574 397 (156)
income statement
STATEMENT OF ACTUARIAL VALUES OF 30.06.2009 30.06.2008 31.12.2008
ASSETS AND LIABILITIES ON STATUTORY Rm Rm Rm
BASIS
Reporting excess - long-term 5 291 5 253 4 913
insurance business (4)
Disregarded assets in terms of (443) (436) (489)
statutory requirements (8)
Capital adjustments 501 330 300
Statutory excess - long-term 5 349 5 147 4 724
insurance business (4)
Capital adequacy requirement (CAR) 2 186 1 843 2 336
(Rm)
Ratio of long-term insurance 2.4 2.8 2.0
business excess to CAR (times)
Discretionary margins 1 583 1 956 1 756
(4) The long-term insurance business includes both insurance and investment
contract business and is the simple aggregate of all the life insurance
companies in the group. It includes minority interests and other items,
which are eliminated on consolidation. It excludes non-insurance business.
(5) Investment variances reflect the impact of actual investment returns on the
value of future expense recoveries and include any change in the PGN 110
(Allowance for embedded investment derivatives) liability.
(6) Recognition of Metropolitan Staff Retirement Fund surplus.
(7) Includes deferred tax on contract holder capital gains and losses.
(8) Disregarded assets are those as defined in the South African Long Term
Insurance Act and are only applicable to South African Long Term insurance
companies. Adjustments are also made for the international insurance
companies from reporting excess to statutory excess as required by their
regulators.
METROPOLITAN HOLDINGS - GROUP RESULTS
CONSOLIDATED INCOME 6 mths to 6 mths to 12 mths to
STATEMENT 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Net insurance premiums 4 809 4 585 10 405
received
Fee income (9) 570 504 1 071
Investment income 2 140 2 021 4 396
Net realised and fair (386) (1 920) (8 484)
value losses
Net income 7 133 5 190 7 388
Net insurance benefits and 4 270 3 760 8 069
claims
Change in liabilities (124) (1 143) (4 468)
Change in insurance 586 (427) (1 451)
contract
liabilities
Change in (688) (630) (2 990)
investment
contracts with DPF
liabilities
Change in (22) (86) (27)
reinsurance
provision
Fair value adjustments on 401 496 189
investment contract
liabilities
Fair value adjustments on 5 5 18
collective investment
scheme liabilities
Depreciation, amortisation 46 125 221
and impairment expenses
(*)
Employee benefit expenses 799 569 1 269
(#)
Sales remuneration 501 481 1 095
Other expenses (*) 661 500 1 151
Expenses 6 559 4 793 7 544
Results of operations 574 397 (156)
Share of (loss)/profit of (17) 3 (2)
associates
Share of loss of joint - (7) (26)
venture
Finance costs (10) (88) (94) (188)
Profit/(loss) before tax 469 299 (372)
Income tax (270) (76) 77
(expenses)/credits
Earnings 199 223 (295)
Attributable to:
Owners of the parent 186 206 (319)
Minority interests 13 17 24
199 223 (295)
Basic earnings per share 35.63 39.31 (61.23)
(cents)
Diluted earnings per share 37.71 40.80 (27.06)
(cents)
(9) Fee income consists of the following:
Investment contracts: R33 million (30.06.2008: R43 million; 31.12.2008: R94
million)
Trust and fiduciary services: R73 million (30.06.2008: R64 million;
31.12.2008: R144 million)
Other fee income: R464 million (30.06.2008: R397 million; 31.12.2008: R833
million)
(10) Finance costs consist of the following:
Preference shares: R64 million (30.06.2008: R69 million; 31.12.2008: R138
million)
Subordinated redeemable debt: R23 million (30.06.2008: R23 million;
31.12.2008: R46 million)
Other: R1 million (30.06.2008: R2 million; 31.12.2008: R4 million)
(*) A provision for a loan impairment raised in prior years for
Metropolitan Card Operations has been reversed during the current
period and written off against other expenses.
(#) June 2008 is net of R142 million employee benefit asset recognised
(December 2008: R75 million).
METROPOLITAN HOLDINGS - GROUP RESULTS
RECONCILIATION OF Basic earnings Diluted earnings
HEADLINE EARNINGS
attributable to owners
of parent
6 mths 6 mths 12 mths 6 mths 6 mths 12 mths
2009 2008 2008 2009 2008 2008
Rm Rm Rm Rm Rm Rm
Earnings 186 206 (319) 186 206 (319)
Finance costs - 64 69 138
preference shares
Diluted earnings 250 275 (181)
Goodwill impairment 37 30 44 37 30 44
Headline earnings (11) 223 236 (275) 287 305 (137)
Net realised and fair (33) 41 603 (33) 41 603
value (gains)/losses on
excess
Basis and other changes 152 267 580 152 267 580
and investment
variances
Employee benefit assets - (142) (37) - (142) (37)
Dilutory effect of 2 1 1
subsidiaries (12)
Investment income on - - 1
treasury shares -
contract holders (13)
Core headline 342 402 871 408 472 1 011
earnings (14)
(11) Headline earnings consist of operating profit, investment income, net
realised and fair value gains, investment variances, basis and other
changes and the first-time recognition of an employee benefit asset.
(12) Metropolitan Health and Metropolitan Kenya are consolidated at 100% in the
results. For the purposes of diluted core headline earnings, minority
interests and investment returns are reinstated.
(13) For diluted core headline earnings, treasury shares held on behalf of
contract holders are deemed to be issued. For diluted earnings and
headline earnings, these shares are deemed to be cancelled.
(14) Net realised and fair value gains on investment assets, investment
variances and basis and other changes can be volatile; therefore core
headline earnings have been disclosed that comprise operating profit and
investment income on shareholder assets.
METROPOLITAN HOLDINGS - GROUP RESULTS
EARNINGS PER SHARE (cents) 6 mths to 6 mths to 12 mths to
attributable to owners of parent 30.06.2009 30.06.2008 31.12.2008
Basic
Core headline earnings 65.52 76.72 167.18
Headline earnings 42.72 45.04 (52.78)
Earnings 35.63 39.31 (61.23)
Weighted average number of shares 522 524 521
(million)
Diluted
Core headline earnings 61.54 70.03 151.12
Weighted average number of shares 663 674 669
(million)
Headline earnings 43.29 45.25 (20.48)
Earnings 37.71 40.80 (27.06)
Weighted average number of shares 663 674 669
(million)
DIVIDENDS 2009 2008
Ordinary listed shares (cents per share)
Interim 40.00 40.00
Final 55.00
Total 95.00
METROPOLITAN HOLDINGS - GROUP RESULTS
DIVIDENDS
Convertible redeemable preference shares A1 A2 A3
Number of shares million 75.8 12.7 34.4
Redemption value (per share) R 5.12 9.18 9.18
Paid - 31 March 2008 Rate 16.1% 59 cps 18.0%
Rm 31 8 28
Paid - 30 September 2008 Rate 16.9% 40 cps 18.7%
Rm 32 5 29
Payable - 31 March 2009 Rate 16.8% 55 cps 19.0%
Rm 33 7 30
Payable - 30 September 2009 Rate 14.1% 40 cps 15.8%
Rm 29 5 26
ANALYSIS OF DILUTED CORE HEADLINE 6 mths to 6 mths to 12 mths to
EARNINGS 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Retail business 192 225 448
Operating profit 270 284 612
Tax (78) (59) (164)
Corporate business 50 72 153
Operating profit 70 93 211
Tax (20) (21) (58)
International business 46 45 94
Operating profit 51 49 107
Tax (5) (4) (13)
Asset management business 10 24 65
Operating profit 15 34 92
Tax (5) (10) (27)
Health business 41 43 100
Operating profit 77 61 142
Tax (36) (18) (42)
Shareholder capital 69 63 151
Holding company expenses (38) (32) (55)
Strategic ventures (37) (36) (78)
Investment income on shareholder 238 243 501
excess
Income tax on investment income (94) (112) (217)
Diluted core headline earnings 408 472 1 011
METROPOLITAN HOLDINGS - GROUP RESULTS
RESULTS OF OPERATIONS Results of operations
FROM ADMINISTRATION
BUSINESS
(gross of minority
interests and before
finance costs and
tax)
Net Expenses 6 mths to 6 mths to 12 mths to
income 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm Rm
Rm
Health business 472 (395) 77 61 141
Asset administration 54 (36) 18 23 56
Asset management 49 (51) (2) 15 37
Metropolitan Card 7 (35) (28) (22) (48)
Operations
582 (517) 65 77 186
METROPOLITAN HOLDINGS - GROUP RESULTS
CONSOLIDATED STATEMENT OF 6 mths to 6 mths to 12 mths to
COMPREHENSIVE INCOME 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Earnings 199 223 (295)
Other comprehensive income for the (15) 12 40
year, net of tax
Exchange differences on (35) - 16
translating foreign operations
Land and buildings revaluation 29 17 30
Change in non-distributable 1 - -
reserves
Income tax relating to components (10) (5) (6)
of other comprehensive income
Total comprehensive income for the 184 235 (255)
year
Total comprehensive income
attributable to:
Owners of the parent 182 217 (283)
Minority interest 2 18 28
184 235 (255)
CONSOLIDATED STATEMENT OF CHANGES 6 mths to 6 mths to 12 mths to
IN EQUITY 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Changes in share capital
Balance at beginning 51 19 19
Staff share scheme shares released 5 3 31
Decrease in treasury shares held on 1 1 1
behalf of contract holders
Balance at end 57 23 51
Changes in other reserves
Balance at beginning 532 495 495
Total comprehensive income (4) 11 36
Employee share schemes - value of 1 2 4
services provided
Transfer to retained earnings (3) - (3)
Balance at end (15) 526 508 532
Changes in retained earnings
Balance at beginning 5 264 6 303 6 303
Total comprehensive income 186 206 (319)
Dividend paid (287) (312) (520)
Shares repurchased - (201) (203)
Transfer from other reserves 3 - 3
Balance at end 5 166 5 996 5 264
Equity attributable to owners of 5 749 6 527 5 847
the parent
Changes in minority interests
Balance at beginning 141 124 124
Total comprehensive income 2 18 28
Dividend paid (14) (12) (12)
Metropolitan Nigeria transferred to 36
subsidiary
Other 1 1 1
Balance at end 166 131 141
Total equity 5 915 6 658 5 988
(15) Other reserves consist of the following:
Land and buildings revaluation reserve: R199 million (30.06.2008: R173
million; 31.12.2008: R182 million)
Foreign currency translation reserve: (R23 million) (30.06.2008: (R11
million); 31.12.2008: R1 million)
Fair value reserve: R53 million (30.06.2008: R50 million; 31.12.2008: R53
million)
Non-distributable reserve: R297 million (30.06.2008: R296 million;
31.12.2008: R296 million)
METROPOLITAN HOLDINGS - GROUP RESULTS
CONSOLIDATED STATEMENT OF CASH 6 mths to 6 mths to 12 mths to
FLOWS 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Net cash inflow/(outflow) from 507 (1 140) 1 455
operating activities
Net cash outflow from investing (43) (85) (163)
activities
Net cash outflow from financing (302) (586) (760)
activities
Net cash flow 162 (1 811) 532
Effect of foreign exchange rate (1) 3 4
changes
Cash resources at beginning 8 810 8 274 8 274
Cash resources at end 8 971 6 466 8 810
SEGMENT REPORT 6 mths to 6 mths to 12 mths to
30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Revenue
Premiums received 5 335 5 643 11 855
Retail 3 418 3 666 7 931
Corporate 1 307 1 490 2 899
Health 6 9 19
International 604 478 1 006
Fee income 570 504 1 071
Retail 27 38 64
Corporate 46 42 92
Asset management 98 105 220
Health 456 380 787
International - 6 34
Shareholder capital 2 6 11
Inter-segment fee income (59) (73) (137)
Expenses
Payments to contract holders 5 226 4 646 9 795
Retail 2 488 2 321 5 013
Corporate 2 403 1 992 4 141
Health 8 8 16
International 327 325 625
Other expenses 2 095 1 769 3 924
Retail 1 158 1 094 2 415
Corporate 176 168 325
Asset management 87 81 141
Health 388 325 664
International 213 169 381
Shareholder capital 126 (10) 119
Inter-segment expenses (53) (58) (121)
- The South African operations are segregated into retail, corporate, asset
management, health and shareholder capital. The international companies -
Botswana, Ghana, Kenya, Lesotho, Mauritius, Namibia, Nigeria and Swaziland
- are all managed as a single operating segment.
- Segment assets did not change materially from 31 December 2008, except for
market-related movements.
- Other segment information used to assess the performance of the operating
segments is disclosed throughout the results and includes, diluted core
headline earnings, new business premiums, value of new business and
profitability of new business as a % of APE.
- In June 2008 and December 2008 shareholder capital expenses are net of
first-time recognition of employee benefit assets and the movements in
employee benefit assets not being utilised by the group.
METROPOLITAN HOLDINGS - GROUP RESULTS
EMBEDDED VALUE 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Reporting excess - long-term 5 291 5 253 4 913
insurance business
Disregarded assets (16) (174) (124) (177)
Dilutory effect of (4) (7) (7)
subsidiaries (17)
Reclassification from non- (58) 21 7
covered business
Diluted net asset value - 5 055 5 143 4 736
covered business
Net value of in-force business 3 866 4 159 4 161
Individual life 3 205 3 390 3 501
Gross value of in-force 3 576 3 843 3 864
business
Less cost of capital (371) (453) (363)
Employee benefits 661 769 660
Gross value of in-force 840 911 842
business
Less cost of capital (179) (142) (182)
Diluted embedded value - 8 921 9 302 8 897
covered business
Non-covered business
Net assets - other businesses 458 1 274 934
Reclassification to covered 58 (21) (7)
business
Consolidation adjustments (121) (135) (121)
Adjustments for dilution 1 019 1 056 1 029
Dilutory effect of 88 90 88
subsidiaries (17)
Staff share scheme loans 85 119 91
Treasury shares held on 10 8 9
behalf of contract holders
Liability - convertible 836 839 841
redeemable preference
shares
Diluted net asset value - non- 1 414 2 174 1 835
covered business
Net value of in-force 633 582 598
business
Asset management 219 233 280
Health 718 681 664
Holding company expenses (18) (304) (332) (346)
Diluted embedded value - non- 2 047 2 756 2 433
covered business
EMBEDDED VALUE 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Diluted adjusted net asset 6 469 7 317 6 571
value
Value of in-force business 4 499 4 741 4 759
Diluted embedded value 10 968 12 058 11 330
Required capital - covered 3 644 3 586 3 813
business (adjusted for
qualifying debt)
Surplus capital - covered 1 411 1 546 923
business
Diluted embedded value per 1 654 1 819 1 709
share (cents)
Diluted net asset value per 976 1 104 991
share (cents)
Diluted number of shares in 663 663 663
issue (million) (19)
(16) Disregarded assets as disclosed in the statement of actuarial values of
assets and liabilities are adjusted for internally developed software,
receivables older than 12 months and recognised employee benefit assets.
(17) For accounting purposes, Metropolitan Health and Metropolitan Kenya have
been consolidated at 100% in 2008 in the balance sheet. For embedded value
purposes, disclosed on a diluted basis, the minority interests and related
funding have been reinstated.
(18) The holding company expenses reflect the present value of projected
recurring expenses of that company.
(19) The diluted number of shares in issue takes into account all issued shares,
assuming conversion of the convertible redeemable preference shares and the
release of staff share scheme shares, and includes the treasury shares held
on behalf of contract holders.
METROPOLITAN HOLDINGS - GROUP RESULTS
EMBEDDED VALUE Net Value 30.06.2009 30.06.2008 31.12.2008
ATTRIBUTABLE TO GROUP asset of Rm Rm Rm
value in-
Rm force
Rm
Covered business
Metropolitan Life Ltd 4 478 3 276 7 754 8 199 7 709
Metropolitan Odyssey 36 - 36 35 35
Union Life 39 11 50 36 45
International 502 579 1 081 1 032 1 108
Metropolitan Life 59 - 59 52 58
International
Metropolitan Namibia 154 299 453 393 468
Metropolitan 122 62 184 188 194
Botswana
Metropolitan Lesotho 132 203 335 311 315
Metropolitan Kenya 8 3 11 17 16
Metropolitan Ghana (11) 12 1 15 8
Metropolitan 8 (5) 3 - 12
Swaziland
Metropolitan Nigeria 30 5 35 56 37
Total covered business 5 055 3 866 8 921 9 302 8 897
Non-covered business
Asset management 54 219 273 295 377
Metropolitan Health 185 718 903 890 923
Group
Metropolitan Holdings 1 175 (304) 871 1 571 1 133
(after consolidation
adjustments)
Total non-covered 1 414 633 2 047 2 756 2 433
business
Total embedded value 6 469 4 499 10 968 12 058 11 330
Diluted net asset (1 352)
value - non-covered
business
Disregarded assets 174
Reporting excess - 5 291
long-term insurance
business
- Net of minority interests.
- An additional R15 million was invested in Metropolitan Ghana in August
2009.
METROPOLITAN HOLDINGS - GROUP RESULTS
VALUE OF NEW BUSINESS 6 mths to 6 mths to 12 mths to
30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Retail business 26 23 211
Gross value of new business 31 27 223
Less: Cost of capital (5) (4) (12)
Corporate business 10 13 20
Gross value of new business 15 20 31
Less: Cost of capital (5) (7) (11)
International business 4 6 17
Gross value of new business 4 6 17
Less: Cost of capital (0) (0) (0)
Value of covered new business 40 42 248
Value of non-covered new business 64 70 123
Asset management 23 22 39
Health 41 48 84
Total value of new business 104 112 371
- The results exclude Metropolitan Ghana, Metropolitan Kenya, Metropolitan
Nigeria and Metropolitan Swaziland as these businesses are in start-up
phase.
- Net of minority interests.
- Due to rounding, the cost of capital for the international business is less
than R1 million.
METROPOLITAN HOLDINGS - GROUP RESULTS
NEW BUSINESS PREMIUMS 6 mths to 6 mths to 12 mths
- COVERED BUSINESS 30.06.2009 30.06.2008 to
Rm Rm 31.12.200
8
Rm
Recurring premiums
Retail business 450 416 961
Corporate business 110 86 210
International 68 49 107
business
628 551 1 278
Single premiums
Retail business 1 103 1 474 3 239
Corporate business 419 589 979
International 68 68 96
business
1 590 2 131 4 314
Annual premium 787 764 1 709
equivalent (APE)
Retail business 560 563 1 285
Corporate business 152 145 308
International 75 56 116
business
Present value of 4 138 4 622 10 354
premiums (PVP)
Retail business 2 620 3 157 7 426
Corporate business 1 200 1 238 2 431
International 318 227 497
business
- From June 2009 all international premiums have been included.
- Net of minority interests.
PROFITABILITY OF NEW BUSINESS - 6 mths to 6 mths to 12 mths to
COVERED BUSINESS 30.06.2009 30.06.2008 31.12.2008
% of APE 5.1 5.5 14.5
Retail business 4.6 4.1 16.4
Corporate business 6.6 9.0 6.5
International business 5.3 10.7 14.7
% of PVP 1.0 0.9 2.4
Retail business 1.0 0.7 2.8
Corporate business 0.8 1.1 0.8
International business 1.3 2.6 3.4
- Corporate value of new business includes value generated in respect of new
administration contracts secured, where premium income is not applicable.
- International business margins include premium income but no value of new
business for start up businesses.
METROPOLITAN HOLDINGS - GROUP RESULTS
SOURCE OF NEW BUSINESS 30.06.2009 30.06.2008 31.12.2008
PRODUCTION - COVERED
BUSINESS
Individual life -
insurance and investment
business
APE Total APE Total APE Total
% premium % premium % premium
% % %
Personal financial 45 47 40 32 39 31
advisors
Broker distribution 22 32 25 28 27 36
Wholesale distribution 22 9 17 5 20 7
Third party business 1 5 9 29 5 19
International 10 7 9 6 9 7
PRINCIPAL ASSUMPTIONS (South 30.06.2009 30.06.2008 31.12.2008
Africa) (20) % % %
Pre-tax investment return
Equities 12.8 13.0 11.0
Properties 10.3 13.0 8.5
Government stock 9.3 11.0 7.5
Cash 8.3 9.0 6.5
Risk discount rate (RDR) (21) 11.8 12.8 10.0
Investment return (before tax) - 11.6 12.4 9.8
smoothed bonus
Expense inflation rate 6.0 7.8 4.3
(20) The principal assumptions relate only to the South African life insurance
business. Assumptions relating to international life insurance businesses
are based on local requirements and can differ from the South African
assumptions.
(21) The June 2008 RDR has been restated to comply with PGN 107 (Embedded value
reporting).
MINORITY INTERESTS 30.06.2009 30.06.2008 31.12.2008
% % %
Metropolitan Health Group 17.6 17.6 17.6
Union Life 50.0 50.0 50.0
Metropolitan Namibia 18.0 18.0 18.0
Metropolitan Botswana 24.2 24.2 24.2
Metropolitan Kenya 33.3 33.3 33.3
Metropolitan Ghana 40.0 40.0 40.0
Metropolitan Nigeria 50.0 50.0 50.0
METROPOLITAN HOLDINGS - GROUP RESULTS
LONG-TERM INSURANCE Net In-force business New business
BUSINESS: worth written
SENSITIVITIES -
30.06.2009
Net Gross Cost Net Gross Cost
value value of value value of
CAR CAR
Rm Rm Rm Rm Rm Rm Rm
Base value 5 055 3 866 4 416 (550) 40 50 (10)
1% increase in risk 3 601 4 151 (550) 28 38 (10)
discount rate
% change (7) (6) - (30) (24) -
1% reduction in 4 173 4 723 (550) 52 62 (10)
risk discount
rate
% change 8 7 - 30 24 -
10% decrease in 4 183 4 733 (550) 58 68 (10)
future expenses
% change (1) 8 7 - 45 36 -
10% decrease in 4 014 4 564 (550) 73 83 (10)
lapse, paid-up
and surrender
rates
% change 4 3 - 83 66 -
5% decrease in 4 031 4 581 (550) 58 68 (10)
mortality and
morbidity for
assurance
business
% change 4 4 - 45 36 -
5% decrease in 3 846 4 396 (550) 39 49 (10)
mortality for
annuity business
% change (1) - - (3) (2) -
1% reduction in 5 116 3 955 4 481 (526) 54 64 (10)
gross investment
return,
inflation rate
and risk
discount rate
% change (2) 1 2 1 (4) 35 28 -
1% reduction in 4 970 3 716 4 242 (526) 32 42 (10)
gross investment
return only (no
change in risk
discount rate)
% change (2) (2) (4) (4) (4) (20) (16) -
METROPOLITAN HOLDINGS - GROUP RESULTS
In-force business New business
written
LONG-TERM INSURANCE Net Net Gross Cost Net Gross Cost
BUSINESS: SENSITIVITIES worth value value of value value of
- 30.06.2009 CAR CAR
Rm Rm Rm Rm Rm Rm Rm
Base value 5 055 3 866 4 416 (550) 40 50 (10)
1% reduction in 5 200 3 797 4 347 (550) 50 60 (10)
inflation rate
% change 3 (2) (2) - 25 20 -
10% fall in market 4 768 3 661 4 211 (550)
value of equities
and properties
% change (6) (5) (5) -
10% reduction in 3 787 4 337 (550) 36 46 (10)
premium
indexation take-
up rate
% change (2) (2) - (10) (8) -
10% decrease in non 58 68 (10)
commission
related
acquisition
expenses
% change 45 36 -
Notes
(1) No corresponding changes in variable policy charges are assumed, although
in practice it is likely that these will be modified according to
circumstances.
(2) Bonus rates are assumed to change commensurately.
(3) The change in the value of cost of CAR is disclosed as nil where the
sensitivity test results in an insignificant change in the value.
METROPOLITAN HOLDINGS - GROUP RESULTS
ANALYSIS OF Non- Covered business 6 mths 6 mths 12 mths
CHANGES IN 2009 2008 2008
GROUP
EMBEDDED
VALUE
Covered NAV VoIF Cost Total Total Total Total
business of Cover-group group group
CAR ed EV EV EV
Rm Rm Rm Rm Rm Rm Rm Rm
Profit from 66 (107) 159 (10) 42 108 115 388
new business
Embedded 64 (107) 157 (10) 40 104 112 371
value from
new
business
Expected 2 - 2 - 2 4 3 17
return to
end of year
Profit from (69) 207 (197) (20) (10) (79) 421 391
existing
business
Expected 37 - 243 (25) 218 255 301 550
return -
unwinding
of RDR
Expected - 341 (341) - - - - -
(or actual)
net of tax
profit
transfer to
net worth
Operating (75) 25 (26) - (1) (76) 146 76
experience
variances
Operating (31) (159) (73) 5 (227) (258) (26) (235)
assumption
changes
Embedded (3) 100 (38) (30) 32 29 536 779
value profit
from
operations
Investment (51) 267 - 30 297 246 82 (281)
return on net
worth
Investment (13) 161 (104) - 57 44 (203) (982)
variances
Economic (17) (128) (142) (4) (274) (291) (232) 247
assumption
changes
Change in - - - - - - - (8)
risk margin
Exchange rate - (19) (6) - (25) (25) (4) 16
movements
Total (84) 381 (290) (4) 87 3 179 (229)
embedded
value profit
ANALYSIS OF Non- Covered business 6 mths 6 mths 12 mths
CHANGES IN 2009 2008 2008
GROUP
EMBEDDED
VALUE
Covered NAV VoIF Cost Total Total Total Total
busi- of Covered group group group
ness CAR EV EV EV
Rm Rm Rm Rm Rm Rm Rm Rm
Changes in - - - - - - (201) (201)
share
capital
Dividend (238) (63) - - (63) (301) (330) (539)
paid
Finance (64) - - - - (64) (69) (138)
costs -
preference
shares
PGN 107 - - - - - - (129) -
restatement
Change in (386) 318 (290) (4) 24 (362) (550) (1 107)
embedded
value
Time weighted return on embedded value 0.0 2.9 (2.1)
(%)
Operating experience variances
Other Negative variances from losses or a reduction in profit
businesses margins in certain of the non-life companies.
Long-term insurance business
Net asset Positive contribution from higher than expected mortality
value (NAV) profits partially offset by negative variances from
higher than expected expenses.
Value of in Negative contributions mainly from greater than expected
force (VoIF) net employee benefit outflows.
Operating assumption changes
Other business Negative contribution from lower future profitability
expected from the asset management businesses.
Long-term insurance business
Net asset Negative changes from the strengthening of the mortality
value (NAV) basis at longer durations for grouped individual
business, an increase in the assumed per policy expense
for individual life contracts and a strengthening of the
expense basis for international.
Value of in Negative change due to an increase in the assumed future
force (VoIF) expenses of the corporate business and an increase in
assumed withdrawals on grouped individual and smoothed
bonus business.
METROPOLITAN HOLDINGS - GROUP RESULTS
FUNDS RECEIVED 6 mths to 6 mths to 12 mths to
FROM CLIENTS Gross Gross 30.06.2009 30.06.2008 31.12.2008
inflow outflow Net inflow Net inflow Net inflow
Rm Rm Rm Rm Rm
Retail business 3 418 (2 488) 930 1 345 2 920
Corporate business 1 307 (2 403) (1 096) (502) (1 243)
International 604 (327) 277 153 382
business
Long-term 5 329 (5 218) 111 996 2 059
insurance business
cash flows
Health business 7 291 (7 873) (582) 1 151 1 837
Asset 10 070 (8 319) 1 751 2 438 3 321
administration
business
Asset management 1 086 (446) 640 961 959
business
Corporate business 48 - 48 5 159
Total funds 23 824 (21 856) 1 968 5 551 8 335
received from
clients
PREMIUMS RECEIVED 6 mths to 6 mths to 12 mths to
30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Recurring premiums 3 726 3 561 7 472
Retail business 2 313 2 235 4 689
Corporate business 888 901 1 924
International business 525 425 859
Single premiums 1 603 2 073 4 364
Retail business 1 105 1 431 3 242
Corporate business 419 589 975
International business 79 53 147
Capitation contracts - health 6 9 19
business
Segment premiums received 5 335 5 643 11 855
Adjustment for premiums received (555) (1 067) (1 706)
from investment contract holders
Transfers between insurance, 29 9 256
investment and investment with DPF
contracts
Net insurance premiums per income 4 809 4 585 10 405
statement
- June 2008 and December 2008 exclude premiums received in Metropolitan
Nigeria as it was a joint venture.
METROPOLITAN HOLDINGS - GROUP RESULTS
PAYMENTS TO CONTRACT HOLDERS 6 mths to 6 mths to 12 mths to
30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Individual life 2 723 2 553 5 475
Death and disability claims 582 559 1 084
Maturity claims 803 839 1 710
Annuities 373 323 664
Withdrawal benefits 73 68 156
Surrenders 926 840 1 977
Re-insurance recoveries (34) (76) (116)
Employee benefits 2 495 2 085 4 304
Death and disability claims 616 566 1 191
Maturity claims 75 143 211
Annuities 378 335 695
Withdrawal benefits 173 209 378
Terminations 286 191 508
Disinvestments 1 073 742 1 538
Re-insurance recoveries (106) (101) (217)
Capitation contracts 8 8 16
Total payments to contract holders 5 226 4 646 9 795
Adjustment for payments to (985) (895) (1 982)
investment contract holders
Transfers between insurance, 29 9 256
investment and investment with DPF
contracts
Net insurance benefits and claims 4 270 3 760 8 069
per income statement
- Segment information is disclosed in the segment report and reconciles to
total payments to policyholders.
- June 2008 and December 2008 exclude payments to contract holders in
Metropolitan Nigeria as it was a joint venture.
METROPOLITAN HOLDINGS - GROUP RESULTS
NUMBER OF EMPLOYEES 30.06.2009 30.06.2008 31.12.2008
Indoor staff 5 496 5 205 5 338
Insurance companies 2 708 2 684 2 751
Retail 1 227 1 248 1 280
Union Life 112 103 107
Cover2Go 13 16 16
Employee benefits 404 389 400
International 419 403 425
Group services 533 525 523
Metropolitan Health Group 2 360 2 057 2 108
Asset management 80 80 81
Asset administration 66 65 77
Metropolitan Card Operations 14 50 34
Metropolitan Retirement 138 132 139
Administrators
DirectFin Solutions 114 118 129
Holding company 16 19 19
Field staff 3 762 3 636 3 715
Retail 2 686 2 619 2 713
Union Life 187 186 173
International 889 831 829
Total 9 258 8 841 9 053
METROPOLITAN HOLDINGS - GROUP RESULTS
ANALYSIS OF EXPENSES 6 mths to 6 mths to 12 mths to
30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Depreciation, amortisation and 46 125 221
impairment expenses
Employee benefit expenses 799 569 1 269
Sales remuneration 501 481 1 095
Other expenses 661 500 1 151
Finance costs 88 94 188
Total expenses 2 095 1 769 3 924
Long-term insurance business 1 502 1 395 2 979
Administration expenses 853 797 1 555
Sales remuneration 501 481 1 095
Asset management fees 96 98 209
Direct property expenses 52 19 120
Administration business 511 447 888
Finance costs - preference shares 87 92 186
and subordinated redeemable debt
Holding company 38 38 63
Employee benefit assets - (142) (75)
Consolidation adjustments (43) (61) (117)
Total expenses 2 095 1 769 3 924
- Segment information is disclosed in the segment report.
METROPOLITAN HOLDINGS - GROUP RESULTS
ASSETS UNDER MANAGEMENT 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
Intangible assets 488 525 525
Owner-occupied properties 700 607 678
Property and equipment 197 278 186
Investment properties 3 117 2 790 3 031
Investment in associates 1 365 592 663
Investment in joint venture - 54 35
Employee benefit assets 241 319 248
Financial assets 51 903 62 682 53 692
Equity securities 20 225 30 442 21 167
Debt securities 15 737 14 082 15 968
Funds on deposit and other money 4 134 4 388 3 409
market instruments
Unit-linked investments 9 911 10 724 10 256
Derivative financial instruments 822 1 814 1 764
Loans and receivables 1 074 1 232 1 128
Insurance and other receivables 1 441 1 425 1 507
Deferred income tax 10 7 12
Reinsurance contracts 230 271 212
Current income tax assets 13 40 14
Cash and cash equivalents 8 971 6 466 8 810
Non-current assets held for sale - 19 -
Total on-balance sheet assets 68 676 76 075 69 613
Collective investments 18 777 20 135 18 832
Health 4 808 4 434 4 624
Asset management - segregated assets 4 443 3 893 3 238
Employee benefits - segregated 1 499 1 399 1 550
assets
Total assets under management 98 203 105 936 97 857
METROPOLITAN HOLDINGS - GROUP RESULTS
ANALYSIS OF ASSETS UNDER MANAGEMENT 30.06.2009 30.06.2008 31.12.2008
Rm Rm Rm
On-balance sheet assets
Managed and administered by Metam 49 362 55 175 50 092
Properties 3 802 3 384 3 689
Collective investment schemes 2 014 1 357 1 647
Investment assets 43 546 50 434 44 756
Administered and/or managed by 1 043 971 977
Metropolitan Collective Investments
(excludes managed by Metam)
Managed by external managers 14 014 14 545 13 754
Other assets 4 257 5 384 4 790
68 676 76 075 69 613
Off-balance sheet assets
Managed and administered by Metam 8 600 8 525 7 543
Collective investment schemes 3 344 3 806 3 535
Segregated assets 5 256 4 719 4 008
Administered and/or managed by 15 432 16 329 15 297
Metropolitan Collective Investments
(includes white label funds)
Employee benefits - segregated 687 573 780
assets
Health 4 808 4 434 4 624
Total assets under management 98 203 105 936 97 857
METROPOLITAN HOLDINGS - GROUP RESULTS
ANALYSIS OF ASSETS 30.06.2009 30.06.2008 31.12.2008
BACKING GROUP EXCESS
Rm % Rm % Rm %
Equity securities 1 900 33.0 3 379 51.8 2 504 42.8
Collective investment 636 11.1 927 14.2 629 10.8
schemes
Debt securities 703 12.2 328 5.0 295 5.0
Owner-occupied 655 11.4 607 9.3 671 11.5
properties
Investment properties 303 5.2 170 2.6 286 4.9
Cash and cash 1 947 33.9 1 585 24.3 2 100 35.9
equivalents
Goodwill 177 3.1 214 3.3 209 3.6
Other net assets 765 13.3 657 10.1 495 8.5
7 086 123.2 7 867 120.6 7 189 123.0
Redeemable preference (836) (14.5) (839) (12.9) (841) (14.4)
shares
Subordinated redeemable (501) (8.7) (501) (7.7) (501) (8.6)
debt
Excess - group per 5 749 100.0 6 527 100.0 5 847 100.0
reporting basis
GROUP EXCESS - TOP 10 30.06.2009 30.06.2008 31.12.2008
EQUITY HOLDINGS
Rm % Rm % Rm %
MTN Group Ltd 137 7.2 275 8.1 192 7.6
Billiton Plc 96 5.0 238 7.0 125 5.0
Sasol Ltd 88 4.6 222 6.6 100 4.0
Standard Bank Group Ltd 81 4.3 167 4.9 115 4.6
Anglo American Plc 70 3.7 263 7.8 90 3.6
FirstRand Ltd 67 3.5 72 2.1 132 5.3
Compagnie Financiere 66 3.5 70 2.8
Richemont
ABSA Ltd 60 3.2
Vodacom group Ltd 53 2.8
Bidvest Ltd 44 2.3
Impala Platinum 243 7.2 122 4.9
Holdings Ltd
Remgro Plc 117 3.5
Grindrod Ltd 76 2.3
Richemont Securities AG 138 4.1
Imperial Holdings Ltd 78 3.1
RMB Holdings 60 2.4
762 40.1 1 811 53.6 1 084 43.3
Total equities backing 1 900 100.0 3 379 100.0 2 504 100.0
excess
METROPOLITAN HOLDINGS - GROUP RESULTS
STOCK EXCHANGE 30.06.2009 31.12.2008 30.06.2008 31.12.2007
PERFORMANCE
6 month period
Value of listed shares 2 180 2 126 2 592 2 570
traded (rand million)
(22)
Volume of listed shares 195 192 200 170
traded (million) (22)
Shares traded (% of 72.9 71.1 72.7 61.4
average listed shares in
issue) (22)
Value of shares traded - 43.1 45.2 47.8 54.4
life insurance (J857 -
Rbn)
Value of shares traded - 1 045 1 320 1 367 1 277
top 40 index (J200 -
Rbn)
Trade prices
Highest (cents per 1 295 1 367 1 520 1 635
share)
Lowest (cents per 941 890 1 080 1 314
share)
Last sale of period 1 165 1 080 1 093 1 509
(cents per share)
Percentage (%) change 16.4 (2.4) (47.5) 3.1
during period (23)
Percentage (%) change - 32.0 (44.7) (55.1) (4.1)
life insurance sector
(J857)
Percentage (%) change - 3.9 (54.1) 19.6 5.4
top 40 index (J200)
30 June/31 December
Price/diluted core 9.47 7.15 7.80 10.61
headline earnings ratio
Dividend yield % 8.15 8.80 9.06 6.30
(dividend on listed
shares)
Dividend yield % - top 3.80 4.27 2.32 2.39
40 index (J200)
STOCK EXCHANGE 30.06.2009 31.12.2008 30.06.2008 31.12.2007
PERFORMANCE
6 month period
Total shares issued
(million)
Listed on JSE 528 542 539 559
Ordinary shares 524 538 533 553
Share incentive 4 4 6 6
scheme
Unlisted - share 12 14 17 23
purchase scheme
Total ordinary shares 540 556 556 582
in issue
Treasury shares held - (16) (16) (26)
by subsidiary
Treasury shares held (1) (1) (1) (1)
on behalf of contract
holders
Adjustment to staff (16) (17) (21) (26)
share scheme shares
(24)
Share incentive (4) (4) (4) (4)
scheme
Share purchase (12) (13) (17) (22)
scheme
Basic number of shares 523 522 518 529
in issue
Adjustment to staff 16 17 21 26
share scheme shares
Treasury shares held 1 1 1 1
on behalf of contract
holders
Convertible redeemable 123 123 123 123
preference shares
Diluted number of 663 663 663 679
shares in issue (25)
Market capitalisation at 7.72 7.16 7.25 10.25
end (Rbn) (26)
Percentage (%) of life 6.69 7.05 5.26 4.93
insurance sector
(22) Percentages have been annualised.
(23) 31.12.2008 and 30.06.2008 are net of 16 million shares acquired for R200
million (31.12.2007: 20 million shares acquired for R310 million)
(24) These are shares which have been issued since 1 January 2001, the date on
which the group adopted AC133 (now IAS39).
(25) The diluted number of shares in issue takes into account all issued shares,
assuming conversion of the convertible redeemable preference shares and the
release of staff share scheme shares, and includes the treasury shares held
on behalf of contract holders.
(26) The market capitalisation is calculated on the fully diluted number of
shares in issue.
Date: 02/09/2009 07:05:01 Produced by the JSE SENS Department.
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