Old Mutual 1st Half Operating Profit +43%, Sells US Life Business

U.K.-based financial-services conglomerate Old Mutual PLC (OML.LN) on Friday posted a 43% rise in first-half operating profit, helped by a recovery in sales, and the company said it is "confident" about its business for the full year.

The company, which has a strong focus on South Africa, also sold its U.S. life business to Harbinger Capital Partners for $350 million.

Old Mutual announced an interim dividend of 1.1 pence a share. Last year, the company didn't pay an interim dividend as part of efforts to conserve capital amid volatile financial markets.

The company said operating profit for the six months ended June 30 was at GBP735 million, up from a restated operating profit of GBP513 million from the same period last year.

The result was higher than the GBP681 million average forecast from 10 analysts.

"Our operating results were substantially ahead of the comparative period with strong sales performance particularly in the South African retail markets and in wealth management," Chief Executive Officer Julian Roberts said.

"We are driving change throughout the Group and are making good progress on our strategy to simplify the Group and improve financial performance...We are confident about the outlook for the full year although market uncertainties remain," Roberts said.

Old Mutual also said its first-half total life insurance sales were at GBP814 million, up 28% from GBP636 million a year earlier on an annual premium equivalent, or APE, basis. APE counts 100% of regular premium sales and 10% of the money earned from selling single-premium products.

The sales result also beat the GBP780 million average forecast from analysts.

The company's capital surplus rose to GBP1.7 billion from GBP1.5 billion at end-December.

On Thursday, the stock closed 1.6% higher at 124 pence. The stock has risen 13% since the start of the year, boosting its market capitalization to around GBP6.73 billion.

In May, Old Mutual tried to fend off speculation that Standard Chartered PLC (STAN.LN) is keen on buying Old Mutual's 54% stake in South Africa's Nedbank Group Ltd. (NED.JO).

Roberts said in May that Nedbank is a "significant" part of the company, but he wouldn't be drawn into whether it was considered a core part of its business.

In March, it said it was planning to partially list its U.S. asset-management arm and dispose its U.S. life business.

The company, with insurance, banking and asset management businesses in 34 countries around the world, itself has said previously it is "in too many geographies and too many lines of businesses."

-By Vladimir Guevarra, Dow Jones Newswires. Tel. +44 (0) 2078429486, vladimir.guevarra@dowjones.com

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