Capricorn Group achieved solid results with profit after tax for the six months ended 31 December 2023, increasing by 18.5% to N$827.6 million, compared to a profit after tax of N$698.2m that was reported in the comparative period in the prior year.
This represents an increase of 19.4% in earnings per share to 152.4 cents. Annualised return on equity at half year increased from 16.6% to 16.8% year-on-year.
“The Group’s strong performance is attributable to loan book growth and increased transaction volumes, offset to some extent by escalated credit impairment charges. Furthermore, the group’s profitability benefitted from implementing IFRS 17 – “Insurance Contracts”. This improvement primarily stems from reduced discretionary policyholder reserves following the application of IFRS 17. Excluding the positive impact of IFRS 17 on the Group’s capital reserves, return on equity would have been 17.3% for the 6 months ended 31 December 2023,” said Thinus Prinsloo, Group CEO.
IFRS 17 requires full retrospective application for disclosure purposes. Consequently, the comparative figures for the six-month period ended on 31 December 2022 were restated. Following this restatement of the comparative period figures, the Group’s profit after tax for the six months ended 31 December 2023 represents a year-on-year increase of 7.5%. Similarly, both headline earnings and earnings per share for the same period experienced a year-on-year growth of 7.2%. All comparisons to figures from the prior period further in this announcement are based on the restated amounts unless explicitly stated otherwise.
According to Prinsloo, the central banks of both Namibia and Botswana have adopted prudent monetary policy measures to counteract inflationary pressures and to protect local currencies in volatile global market conditions brought about by spreading geopolitical tensions. The current outlook is that inflation will stay within the target range of both central banks in the short to medium term, with the possibility of interest rates decreasing in the coming 12 months.
“The Bank of Namibia’s Economic Outlook for December 2023 predicts a deceleration in economic growth, primarily attributed to weakened global demand and an expected contraction in the agriculture sector. The projections indicate real GDP growth rates of 3.9%, 3.4%, and 3.1% for the years 2023, 2024, and 2025 respectively. Despite these challenges, the overarching commitment of Capricorn Group remains focused on sustained growth for the benefit of all stakeholders,” concluded Prinsloo.