OLD MUTUAL HOLDINGS PLC
Old Mutual announces an increase in profitability
Old Mutual Holdings PLC reported a strong rise in profits for 2024, driven by improved business performance, reduced debt, and a focus on sustainability, despite challenges from regional instability and foreign exchange losses. The announcement represents a big jump in profits from its ongoing businesses.
In 2024, the company made KES 1.3 billion in profit after tax up from KES 0.2 billion in 2023. This strong performance is attributed to a combination of strong performances in the asset management business, underwriting profits from insurance businesses and returns from investments. Old Mutual also managed to cut its finance costs in half – from KES 2.4 billion in 2023 to KES 1.2 billion in 2024. This was a direct result of the conversion of shareholder loans to equity, significantly easing its debt burden and improving Old Mutual’s overall financial health.
Despite the changes in financing, Old Mutual’s operating profit before finance costs remained steady at KES 3.8 billion. This is a reflection of the quality of the Holding Group’s portfolio of businesses, which ensures that risks are diversified and minimized, especially when one area of the business faces challenges.
“Our ongoing strategy continues to focus on becoming the first choice for our customers in sustaining, growing, and protecting their prosperity. Consequently, we remain committed to driving sustainability through operational efficiency, continuous product innovation, and a strong focus on customer needs,” Old Mutual Holdings PLC CEO, Arthur Oginga states.
Part of the company’s sustainability strategy is financial inclusion and education. In relation, Old Mutual continues to partner with Safaricom PLC and the Kenya Institute of Curriculum Development (KICD) in initiatives that promote financial literacy in schools across Kenya. So far, more than 10,000 students in 13 counties have benefited from the program. A key tool in designing such training is the Old Mutual Financial Services Monitor (OMFSM), a research initiative that provides valuable insights into the financial habits, needs, and concerns of consumers across different regions. The annual publication analyses data on how people earn, spend, save, and invest, helping in shaping financial education programs and guiding strategic decisions that enhance financial inclusion and economic resilience in the communities Old Mutual serves.
Old Mutual is also active in community projects through Corporate Social Responsibility (CSR) efforts that focus on health and the environment. Activities like tree planting, clean-up events and supporting local clinics have helped the company build a positive image. The company is also investing in digital tools to better serve customers, especially in remote areas.
For instance, in recognition of its responsible corporate practices, UAP Old Mutual Insurance Uganda won the prestigious FIRe Award for its excellence in sustainable reporting. Such wins highlight the company’s ongoing efforts to align its operations with global best practices in environmental, social, and governance (ESG) standards.
However, there were some slowdowns in the year, notably from the sale of the Tanzanian Subsidiary, UAP Insurance Tanzania, which led to a KES 363 million loss on disposal. While this sale was part of a strategy to streamline operations, it did result in a temporary financial setback. Old Mutual Holdings also reported a foreign exchange loss of KES 631 million due to the strengthening of the Kenyan Shilling in 2024, affecting the value of its foreign operations.
Looking ahead, the group continues to make significant strides in enhancing its operational and financial performance, it must contend with multiple challenges. For instance, Old Mutual as a group, continues to face risks from geopolitical developments and economic uncertainties, which have the potential to affect both its financial and operational stability. The suspension of USAID funding, unrest in Eastern Congo and Sudan and political tensions in Kenya and Uganda, have all created additional pressures that could affect the business in 2025.
Despite these challenges, Old Mutual remains confident in its ability to navigate the changing landscape and continue to deliver value to its customers and stakeholders. With a strong and diversified portfolio and solid financial foundation, Old Mutual Holdings PLC is confident of adapting to the aforementioned external shocks and others, while maintaining a focus on long-term growth and profitability.
“We remain optimistic about the future, despite the challenges that lie ahead. We are committed to enhancing underwriting performance across our insurance businesses, expanding our customer base in the asset management business, and delivering sustainable growth. With a clear strategic direction and a strong focus on operational excellence, we are confident that we will sustain our trajectory of growth and success, creating value for both its customers and stakeholders,” Oginga states.
