Left Old Mutual Group’s Chief Executive Officer Arthur Oginga (right) the firm’s Chief Finance Officer David Muchai
Old Mutual Holdings PLC has announced a notable profit after tax of Kes327 million for the first half of 2024, marking a significant recovery from the Kes195 million loss reported in the same period last year.
This impressive turnaround is primarily attributed to a substantial decrease in finance costs and a major reduction in the effective tax rate. Finance costs plummeted from Kes1.8 billion to Kes529 million following the conversion of shareholder loans into equity in 2023, which is pending regulatory approval. Additionally, the effective tax rate was cut dramatically from 150 percent to 70 percent.
Despite these positive financial shifts, the company’s operating profit before financing costs saw a decline of 27 percent, dropping from Kes2.2 billion in the first half of 2023 to Kes1.6 billion by June 30, 2024. This decrease was mainly due to increased medical and flooding claims in Kenya, as well as higher reinsurance expenses in Uganda.
The Group also reported a Kes1.1 billion decrease in other comprehensive income, influenced by the translation effects of foreign currency-denominated subsidiaries into Kenya shillings, following the strengthening of the local currency. This led to a reduction in the consolidated net assets by Kes873 million.
(L-R), Old Mutual Group’s Chief Executive Officer Arthur Oginga and the firm’s Chief Finance Officer David Muchai during the announcement of the half-Year 2024 Financials. The firm announced a profit after tax of Kes327 million for the first half of 2024. This marks a remarkable turnaround from the Kes195 million loss recorded during the same period last year.
Looking forward, Old Mutual remains optimistic about the second half of the year. The company plans to implement a robust strategy centered around product and technological innovation to drive future growth. As a market leader in health insurance, cybercrime protection, alternative investments, and multi-currency unit trusts across East Africa, Old Mutual continues to expand its customer base to 1.9 million. The company’s growth is supported by strategic bancassurance partnerships, increased broker business, and enhanced offerings for multinational corporations.
Arthur Oginga, the Group’s Chief Executive Officer, expressed confidence in the company’s future performance despite the challenges faced in the first half of 2024. “We remain committed to delivering value to our customers and stakeholders, with expectations of GDP growth and easing inflation across our markets,” said Oginga.
Old Mutual’s innovation and leadership were recognized during the period under review. The company won the Best Practice Innovation Award at the Association of Kenyan Insurers (AKI) Awards in March, highlighting its commitment to pioneering solutions in Life Assurance. Additionally, Old Mutual was ranked third in the General Insurance Company of the Year category and received multiple awards in the individual and advisor categories. Brand Finance also named Old Mutual the strongest insurance brand globally, reflecting its strong market presence and reputation.
The Group continues to lead in knowledge sharing through its monthly Old Mutual Financial Services Monitor, which offers valuable insights and analysis for strategic decision-making in the financial sector. Moreover, in June, Old Mutual introduced the Business Roundtable, a strategic network designed to foster collaboration among small and medium-sized enterprises (SMEs) across East Africa. This platform brings together SME owners, investors, financial institutions, professional associations, and industry experts to create opportunities for mutual advancement.