Santam Limited Displays Resilience with Strong Financial Performance Despite Challenges

  • Santam Limited reports robust financial performance for 2023, showcasing resilience amidst challenging conditions.
  • The company's net income increased by 64%, with a return on capital of 28.5%.
  • Despite adverse weather conditions impacting underwriting profit, Santam declares a final dividend of 905.00000 cents per share.
Published by
Lethabo Ntsoane

Santam Limited showcased resilience in its financial performance for the year 2023 despite facing significant challenges in the operating environment. The company reported robust results, demonstrating its ability to navigate through difficult conditions and deliver value to its stakeholders.

Financial Highlights

In its audited consolidated financial statements for the year ended 31 December 2023, Santam revealed impressive key financial results:

MetricYear Ended 31 Dec 2023Year Ended 31 Dec 2022Change
Group insurance revenue (R million)46,88243,082+9%
Ordinary dividend per share (R cents)905.00000845.00000+7%
Basic earnings per share (R cents)2,9731,806+65%
Headline earnings per share (HEPS) (R cents)2,3101,817+27%

Despite challenges, Santam reported a significant increase in net income by 64%, accompanied by a remarkable return on shareholders’ funds of 28.5%. This underscores the company’s resilience and ability to deliver value even in adverse conditions.

Operational Challenges and Performance

Santam faced several challenges during the year, including floods in the Western Cape, hail storms in Gauteng, earthquakes in Turkey, and widespread fires across the country. These natural disasters adversely impacted the profitability of the property class of business, leading to a decline in underwriting profit.

Conventional insurance underwriting profit decreased by 26%, primarily due to the weather-related claims. However, Santam’s Specialist Solutions segment delivered exceptional underwriting results, partially offsetting losses incurred elsewhere. MiWay, a subsidiary, recorded a loss ratio of 59% and an underwriting profit of R168 million.

Dividend Declaration and Outlook

Despite the challenges, Santam remains committed to delivering value to its shareholders. The company declared a final dividend of 905.00000 cents per share for the year ended 31 December 2023, representing a 7% increase from the previous year.

Looking ahead, Santam is optimistic about its future prospects. With a refreshed strategy and new operating model introduced in 2023, the company aims to achieve its 2030 targets and continue delivering superior shareholder returns. Despite uncertainties in the operating environment, Santam remains well-positioned to navigate challenges and capitalize on opportunities, reaffirming its commitment to resilience and sustainable growth.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo