Old Mutual Holdings has announced a Sh327 million profit after tax in the six months ending June 30, 2024, an improvement from a Sh195 million loss during a similar period last year.

The firm attributes profitability to a reduction in finance costs, which fell from Sh1.8 billion to Sh529 million.

“This reduction followed the conversion of shareholder borrowing to equity in 2023 which is awaiting all the necessary regulatory approvals,” Old Mutual said in a statement.

“Additionally, the company benefited from a substantial improvement in its effective tax rate, which decreased by over half of its previous value — from 150 percent to 70 percent.”

In the review period, operating profit declined from Sh2.2 billion to Sh1.6 billion, primarily eaten by a rise in medical and flooding claims in Kenya and higher reinsurance expenses in Uganda.

The Group also experienced a Sh1.1 billion drop in other comprehensive income, driven by the translation effects of foreign currency-denominated subsidiaries into Kenya shillings, following the strengthening of the Kenya shilling.

“Despite the challenges we faced in the first half of the year, we are confident that our strategic initiatives and innovative approach will position us for a strong performance in the coming months,” said Arthur Oginga, the Group’s Chief Executive Officer.

“We remain committed to the delivery of value to our customers and stakeholders, anticipating a GDP growth and easing inflation across our markets.”