Old Mutual guides to strong adjusted earnings growth, even as IFRS profits dip
Old Mutual’s latest trading statement points to a robust first half for 2025 on the measures management emphasises, with adjusted headline earnings and results from operations both up solidly. The flip side: IFRS profit and headline earnings are down year-on-year because of Zimbabwe accounting changes. This split matters – it tells us the underlying engine is running well, but statutory numbers wear a one-off dent.
Final interim results land on Wednesday, 10 September 2025, with a webcast at 11:00 South African time. The figures below are ranges for the six months to 30 June 2025 versus the prior period.
Key guidance ranges for H1 2025
| Key performance indicator | H1 2025 guidance | H1 2024 actual | Estimated change |
|---|---|---|---|
| Results from operations (R million) | 4,498 to 5,346 | 4,243 | +6% to +26% |
| Results from operations per share (cents) | 104.1 to 123.2 | 95.5 | +9% to +29% |
| Adjusted headline earnings (R million) | 3,888 to 4,541 | 3,267 | +19% to +39% |
| Adjusted headline EPS (cents) | 88.9 to 103.6 | 73.5 | +21% to +41% |
| Headline earnings (R million) | 3,553 to 4,718 | 5,825 | -39% to -19% |
| HEPS (cents) | 84.2 to 110.9 | 133.6 | -37% to -17% |
| IFRS profit after tax (R million) | 3,616 to 4,612 | 5,241 | -31% to -12% |
| Basic EPS (cents) | 84.1 to 108.2 | 120.2 | -30% to -10% |
Why adjusted earnings are up while IFRS is down
Old Mutual’s “adjusted headline earnings” is the Group’s primary profit metric. It strips out items management considers not reflective of ongoing performance, and it excludes Zimbabwe profits due to restrictions on accessing capital by way of dividends. On this measure, the business looks in good shape: growth of 19% to 39% is a strong print, helped by better shareholder investment returns as South African and Malawian equity markets outperformed expected returns.
By contrast, headline earnings and IFRS profit are down because of Zimbabwe. The Group implemented a change in functional currency from Zimbabwe Gold to the US dollar from 1 July 2024, which drove an approximately R2.2 billion reduction in Zimbabwe profits. Management notes this had limited impact on net asset value thanks to lower currency translation losses going through equity, but it does pull down IFRS and headline earnings in the period. Crucially, this has no impact on adjusted headline earnings.
Operational momentum: where the growth is coming from
Results from operations – the primary measure of operating performance across segments – are up 6% to 26%. The statement credits:
- Exceptional growth in Old Mutual Insure.
- Favourable financial markets, lifting investment returns.
- Cleaner comparatives: the prior period included once-off adverse mortality experience in Personal Finance and a secured loan impairment in the Mass and Foundation Cluster.
On the less helpful side, there were headwinds from a persistency basis change in the Mass and Foundation Cluster (persistency is how long customers keep policies in force) and higher central costs, including a once-off restructuring provision to reduce future spending.
Per-share boost from the buyback
Per-share metrics look even better than the absolute figures. That is not just operational progress – it is also arithmetic. The 2024 share repurchase programme reduced the weighted average number of ordinary shares to 4,270 million at 30 June 2025, down from 4,359 million a year ago. Fewer shares mean each remaining share captures a larger slice of earnings.
That is why results from operations per share are guided up 9% to 29%, and adjusted headline EPS up 21% to 41%, outpacing the growth in the underlying totals.
What this means for investors in plain English
- Core engine improving: The combination of stronger insurance performance and market tailwinds is driving double-digit growth in adjusted earnings. That is the number management wants you to focus on.
- Statutory optics are messy: IFRS profit and headline earnings fall because of the Zimbabwe currency change. It is sizeable (about R2.2 billion impact), but management frames it as accounting rather than operational pressure, with limited effect on net asset value.
- Costs today, savings tomorrow: A once-off restructuring provision inflates central costs now, with the aim of reducing future spending. Investors should look for detail on expected payback at the results presentation.
- Capital return working: The buyback is doing what it says on the tin – lifting per-share outcomes. It also signals confidence from the board, though any dividend guidance is not disclosed in this statement.
Risks and watch-outs ahead of 10 September
- Quality of insurance growth: “Exceptional growth” at Old Mutual Insure is encouraging. The market will want colour on loss ratios, pricing discipline, and whether any weather or catastrophe experience flattered the period.
- Persistency assumptions: The persistency basis change in Mass and Foundation is a negative offset. Expect questions on lapse trends and whether further assumption tightening is likely.
- Market sensitivity: Shareholder investment returns benefited from strong equity markets. If that support fades in H2, earnings momentum could moderate.
- Zimbabwe volatility: While excluded from adjusted earnings, Zimbabwe continues to sway IFRS and headline numbers. Clarity on capital repatriation prospects and currency stability will be useful.
Numbers that matter for valuation
Two figures are likely to anchor sentiment:
- Adjusted headline earnings: R3,888 million to R4,541 million, up 19% to 39%.
- Adjusted headline EPS: 88.9 to 103.6 cents, up 21% to 41%.
These speak directly to recurring profitability. If the outturn lands toward the top end, the market may reward Old Mutual with a higher multiple, provided the quality of earnings and cash generation stack up. If it lands at the low end, the share price reaction may be more muted given the IFRS declines in the same period.
Housekeeping and timing
The financial information in this trading statement is the board’s responsibility and has not been reviewed or reported on by the external auditors. Interim results will be released on 10 September 2025, with a webcast and Q&A at 11:00 South African time. Access numbers for recorded playback are provided in the RNS, with the replay available until 15 September 2025.
My take: cautiously upbeat
On balance, this is a positive update. Adjusted earnings growth of up to 39% and strong results from operations suggest the core franchise is delivering. The buyback has amplified per-share progress, which is what shareholders actually bank.
The negatives are well flagged: IFRS and headline earnings are down because of Zimbabwe, and there are some assumption and cost headwinds. Those are manageable if the insurance momentum and investment returns hold. I will be watching for detail on the sustainability of Old Mutual Insure’s performance, the expected benefits from restructuring, and how management frames capital allocation for the rest of 2025.
For now, the guidance tilts bullish on the metrics that matter most to management – and arguably to long-term investors.
