Liberty expected to report earnings slide
July 29, 2003
By Bloomberg
Johannesburg - Liberty Group, South Africa's second-biggest life assurer by premiums, will release results on Wednesday next week, with earnings probably falling to R2.02 a share from R2.41, according to the median estimate of four analysts surveyed by Bloomberg News.
Myles Ruck was named chief executive in March after the assurer said earnings might fall "considerably below" last year's figure because of a slump in stock markets and the strengthening rand.
The value of assets managed by Liberty to cover its liabilities to policyholders fell by 12 percent in the first three months of the year. The company said a continued decline would lead to a drop in first-half and full-year profit.
Liberty's profit is more dependent on rising stock prices than that of some rivals because the company shares in as much as a 10th of the gains and losses on about a quarter of its R68
.1 billion in life assurance liabilities. The FTSE/JSE all share index fell 10 percent over the six months.
Stewart Rider, an analyst at Merrill Lynch in Johannesburg, said: "We are looking at earnings coming down, but that's just a function of the market."
Rider said Ruck focused strongly on costs. Investors "would like to see him getting a bit more specific on where he sees cost and what his targets are".
Liberty Group shares have declined 8.5 percent this year, making them the worst performer on the eight-member FTSE/JSE life assurance index. Old Mutual, which sells one in three life policies in South Africa, slipped 4.2 percent.
Liberty Group shares closed R1.19 higher at R50.99 on the JSE Securities Exchange yesterday. - Bloomberg
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
