Old Mutual Records Significant Drop In Profit In H1, 2025, Amid Measures To Improve Bottom Line
Kenya-based Old Mutual Holdings Plc has reported a significant decline in its half-year profitability for the period ending June 30, 2025. The company’s profit after tax dropped by 98 per cent to USD 38,714, from USD 1,927,990 in the same period last financial year.
The report, released on August 26, 2025, lists a drop in its insurance revenue, among other factors, as the reason for its poor performance. Insurance revenue declined by 2.4 per cent to USD 127 million. Old Mutual’s total insurance service result recorded a loss of USD 2.4 million, compared to a loss of USD 1.9 million in the same period last year.
Other reasons for the loss include operational challenges: The company’s operating profit before finance costs fell by 41.2 per cent to USD 7.4 million. This was a result of higher finance costs and commission expenses, among others. Additionally, a lower interest rate environment compressed investment yield.
However, the company’s overall balance sheet looked fairly healthy: Investment income grew by 12.8 per cent to USD 32.5 million. Total assets rose by 5.9 per cent to USD 613,080,495, supported by an increase in investment holdings. The company also booked a total comprehensive income of USD 766,254 after recording a loss of USD 6.76 million in the previous year.
The South African-owned financial services investor has been taking measures to improve its bottom line in across the continent, including the planned sale of its real estate portfolio in East Africa. Announced in 2023, the plan currently includes the sale of its flagship building, UAP Old Mutual Tower (pictured), in Nairobi.
The larger plan to exit the real estate market in Kenya and across East Africa comes as this segment of the business faces headwinds, including a surplus of commercial office space and declining rental yields, which have impacted Old Mutual’s financial performance and led to significant write-downs on the value of its investment properties.
The company is seeking to restructure its balance sheet by reducing debt, and the sale of non-core assets is a key component of this effort. This approach has also been considered for its property holdings in other countries like Uganda and South Sudan, where the company is looking to create a more efficient and profitable investment structure.
Other measures to improve the overall bottom line include selling its short-term insurance business in Tanzania, UAP Insurance Tanzania, to a group of its minority shareholders. This decision, which received regulatory approval, followed a strategic review that concluded there was no clear path to achieving market leadership and acceptable returns on capital in the Tanzanian market.
Featured Image Courtesy www.constructionkenya.com
