Momentum Metropolitan delivers record profits as Covid-19 threat recedes

At R4.4 billion, Momentum Metropolitan’s normalized overall profit for 2022 is significantly higher than the R3 billion recorded in June 2019.

  • Momentum Metropolitan Holdings posted record earnings in the fiscal year ending June 2022.
  • At R4.4 billion, the 2022 normalized overall profit is significantly higher than the R3 billion recorded in June 2019.
  • This brings the group closer to the normalized overall profit target of R5 billion that it aims to achieve by June 2024.
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Momentum Metropolitan Holding’s (MMH) rebound from its Covid-19-induced lows in 2021 has seen its financial metrics top pre-pandemic levels on several fronts.

The Centurion-based insurer generated R4.4 billion of normalized nominal profit in the year ending June, up from just over R1 billion in the prior year, benefiting somewhat from the partial release of the provisions put in place due to the pandemic.

But not only did those profits turn off the lights from the company’s record lows in 2021, they also topped fiscal 2020 and 2019 by billions of rand. MMH recorded a normalized overall profit of R3 billion in the 2019 financial year, with this profit measure subsequently halving in 2020.

The 2022 profits also bring MMH closer to the targets set out in its new strategy, “Reinvent and Grow”, which has moved the target bar to R5 billion in normalized overall profits by the end of June 2024.

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In financial year 2021, MMH recorded a net mortality loss of R2.8 billion due to claims related to the death of Covid-19. This time around, the impact of Covid-19 on its earnings was less severe, resulting in the partial release of opening Covid-19 provisions the company had set aside, boosting earnings by R105 million.

As a result, operating profits were also significantly higher than in 2021 at R3.4 billion compared to R73 million at the time. The company’s return on equity also increased to 22.7% from 4.9% the previous year.

MMH CEO Hillie Meyer said the results also reflect the execution of the group’s strategic initiatives, which are not yet fully reflected in the results.

These strategic initiatives helped MMH increase new business volumes by 10% to R72.7 billion.

Strong growth at Momentum Corporate, which offers group plans and employer-sponsored medical aid, and Metropolitan Life have boosted group sales, but the Momentum brand is still struggling. Momentum Life’s new business volumes were down year-over-year and Momentum Investments’ new business volumes slowed in the fourth quarter, even as the company reported 2% year-on-year growth former.

“These strong results from the first year of the three-year Reinvent and Grow strategy are encouraging and confirm our strong competitive position,” said Meyer.

“With these results, we give ourselves a sporting chance to achieve the F2024 objectives set in our Reinvent and Grow strategy,” he added.

MMH declared a total dividend of 100 cents per common share, up 150% year-over-year.