Liberty sees its profits fall
Following the trend of other insurance companies, Liberty's profits have taken a plunge
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Following the trend of other insurance companies reporting poor financial
performances, Liberty Holdings came out with a statement over the weekend
pertaining to a similar pattern.
According to the statement, Liberty Holdings said that its full year profit
fell as much as 35%.
The company, owned by Africa's largest banking group, said that declining
investment values were mainly responsible for share earnings to drop as much as
between 25 - 35%.
In its statement, Liberty Holdings said that it expected its money management
sectors, as well as its life insurance units to "be in line with 2007 results".
In order to placate worried investors, Liberty also stressed in its statement
that the company is "well capitalized".
The poor global economic picture, leading to the JSE share index falling by
26% last year, has taken a toll on Liberty Holding's investment portfolio. The
money paid by policyholders to obtain insurance is traditionally invested and
the returns used to increase the company's value.
Industry analysts now estimate Liberty Holding's value to be around R19.4
billion, after shares dropped 0.5% to R67.90 last week.
Liberty said that it would come out with a comprehensive full year
performance statement by the end of the month. Last week, Liberty's main
competitor, Sanlam Insurance reported that share earnings dropped by as much as
45% in the past year.
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