Harare – Old Mutual has announced that its upcoming interim results for the six months ended June 30, 2024, will exclude profits from its Zimbabwean operations due to the country’s hyperinflationary economy and restrictions on accessing capital.
In its trading statement, Old Mutual cited the challenges of operating in Zimbabwe’s economic environment, which has been characterised by high inflation and difficulties in repatriating dividends.
As a result, the company will not include Zimbabwean profits in its adjusted headline earnings (AHE) and adjusted headline earnings per share (AHEPS) metrics.
“We exclude the Zimbabwe profits from AHE as the economy is currently hyperinflationary and there are barriers to access capital by way of dividends,” the company said.
“The main contributor to the higher level of growth in headline earnings (HE) relative to AHE is higher shareholder portfolio profits in the Zimbabwean business.”
Despite excluding Zimbabwean profits, Old Mutual reported strong operational performance in its South African businesses, including Old Mutual Insure and Old Mutual Corporate and Mass and Foundation Cluster.
However, lower life profits in Personal Finance and higher central costs offset some of these gains.
The company’s results will be released on the Stock Exchange News Service of the JSE Limited on September 26, 2024.
This is not the first time Zimbabwe is being left out from key profit results by Old Mutual. In March this year, Nehanda Radio reported that the Zimbabwe Stock Exchange (ZSE) listed company had excluded the Southern African country due to hyperinflation.
Zimbabwe’s economy is being threatened by several issues including, rolling power blackouts, inflation, currency fluctuations and drought.
The Zimbabwe Gold (ZiG), the country’s local currency which was introduced in April this year is continuously losing its value against the US dollar.
In August 2024, Zimbabwe experienced a surge in monthly inflation, reaching 0.4%, as the value of ZiG plummeted on the parallel market.
The Zimbabwe National Statistics Agency reported a 0.5 percentage point increase from the previous month’s rate of -0.1%, resulting in a weighted month-on-month inflation rate of 0.4%.
