Momentum warns of tough outlook as market volatility cost it R1.2bn
Financial services group Momentum Metropolitan Holdings says the battering global markets took from the Covid-19 pandemic cost it R1.2bn and pushed the group into a loss in its first quarter, with the group bracing for further pressure on SA consumers in the months ahead.
The effect of the pandemic on global markets offset a good operational performance, with the group saying it saw a normalised headline loss of R284m in the quarter to end-March.
Normalised headline earnings had risen 10% to R1.8bn in the group’s six months to end-December.
Normalised headline earnings is the group’s preferred profit measure and makes adjustments, including for investments into the company’s own securities on behalf of clients. Headline earnings is a widely used profit measure in SA, stripping out exceptional or one-off items.
Momentum said on Thursday it did not foresee a rapid economic recovery, and expected a reduction in new business during its 2021 year.
Financial markets were also not expected to recover losses incurred in March in the immediate future, the group said.
“While the health implications of the coronavirus remain uncertain, the impact of the lockdown regulations on the economy is becoming increasingly tangible,” Momentum said.