Earnings at Sanlam Drop

March 6 - Sanlam insurance and financial group issued a statement this week that showed how poorly the group is performing. 2008 earnings plummeted due to events in the global market, and the company said that it was expecting a "challenging" 2009 in a bid to stabilize its earnings.

In a statement this week, Sanlam said: "The South African economy with its open currency and investment markets has not been shielded from the international events."

Capital write offs in the financial services areas around the globe affected consumer confidence, leading to major international investment markets crashing down.

As a result, Sanlam was directly affected by these events in South Africa, as well as other countries around the globe where the group operates.

Sanlam noted in its statement that total new business volumes decreased by 2% to R100 billion in 2008.

Normalized headline earnings per share for this company decreased by 59% .

"This sets the stage for a challenging 2009 and although we are confident that our businesses are robust enough to weather these challenges, it will impact on our ability to repeat our 2008 operational performances," concluded Sanlam's statement.

As Sanlam looks ahead to the near future, it believes that the current recession in the South African market will impact its local performance, with the average consumer tending to spend less on insurance and more on basic household expenses.