Acquisitions boost H1 earnings at South Africa's Sanlam

JOHANNESBURG Thu Sep 5, 2013 3:35am EDT

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JOHANNESBURG (Reuters) - South African life insurer Sanlam (SLMJ.J) posted a 43 percent jump in first-half earnings on Thursday propelled by earnings from its new businesses in Malaysia and India.

The insurer said diluted headline earnings per share totaled 171.4 cents in the six months to end-June, from 120.1 cents a year earlier. Headline EPS, the benchmark profit measure in South Africa, excludes certain one-time items.

The company, which has personal finance and insurance businesses across Africa, Europe, India, Australia and the United States, had flagged headline earnings would exceed the previous year's by as much as 45 percent.

"The South African business has done remarkably well and then we've had maiden contributions from Malaysian and Indian businesses," Chief Executive Johan van Zyl told Reuters.

New business volumes rose 37 percent to 83 billion rand ($8 billion) after an acquisition run last year netted it a stake in Malaysia's Pacific & Orient Insurance and increased its shareholding in India's Shriram Capital.

Sanlam said it still held 3.2 billion rand in surplus capital at the end of June which was earmarked for expansion.

It is looking to acquire a life insurer in either Malaysia or Indonesia, van Zyl said, and has also set aside 800 million rand to raise its stake in Indian businesses should it gain regulatory approval.

Last month, Sanlam raised 1.16 billion rand through a 10-year subordinated bond. Van Zyl said the debt was rolled over after the maturing of another bond to keep 15 percent of the company's capital in debt.

Short term insurer Santam (SNTJ.J), in which Sanlam holds a controlling stake, has already reported a 13 percent drop in earnings after it was hit by weather-related claims in the first half.

Sanlam shares are up more than 4 percent this year, lagging behind an 8 percent increase by Johannesburg's All-share index .JALSH.

(Reporting by Helen Nyambura-Mwaura; editing by David Dolan)

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