JOHANNESBURG, Aug 5 (Reuters) - Mutual & Federal said on Tuesday
its first-half headline earnings per share fell 69 percent to 58 cents per
share, partly due to heavy fire claims.
The group said Old Mutual Plc intends to dispose of its
shareholding in the business through an auction in September 2008.
Mutual & Federal, which is 75 percent owned by insurer Old Mutual plc,
provides insurance services to the personal, commercial and corporate markets in
South Africa, Namibia, Botswana and Zimbabwe.
Its shares are listed on the Johannesburg Stock Exchange and the Namibian
Stock Exchange.
"(Old Mutual) intends to initiate a competitive sale process in September
2008 to dispose of its entire shareholding in Mutual & Federal," Old Mutual said
in a statement.
Mutual & Federal said its gross premium income rose 2 percent to 4.7
billion rand. Claims rose 6 percent to 2.83 billion rand, driven by a
significant increase in the number of commercial and industrial fire claims and
ongoing difficulties with the motor section of the group schemes portfolio.
"In light of the adverse trading conditions, profit after tax for the
period declined by 66 percent to 172 million rand," said the group.
"The first-half of 2008 has been difficult due to a turn in the cycle and
an unusually large number of fires," Federal Mutual managing director Keith
Kennedy said.
"The board recognises the cyclical nature of short-term insurance results
and is satisfied that the appropriate corrective measures are being taken to
improve underwriting results."
(Reporting by Gugulakhe Lourie, editing by Will Waterman) (For full Reuters
Africa coverage and to have your say on the top issues, visit:
http://africa.reuters.com)
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