(Ecofin Agency) - South African insurer Discovery has decided to propose a generous interim dividend to its shareholders, despite a mixed performance during its half-year ending December 2019. Holders of preference shares will receive just over R505 net of dividend tax for the period as long as holders of ordinary shares receive a dividend of R100 (less 20% tax).

Net insurance revenues and premiums reached R31.5 billion between July and December 2019, up 29.5% compared to the same period in 2018. This performance was driven by good results on both life and non-life insurance segments, but the sluggish economic environment in the country weakened health insurance business.

The drop in operating profit was caused by operating and marketing expenses as well as an increase in potential liabilities from insurance contracts (R3.7 billion). As a result, Discovery's net profit declined by 11% to R2 billion, compared to R2.5 billion in the first half ending December 2018.

After 4 consecutive days of decline, the value of the Discovery share increased by 1.28% by midday on 20 February 2020. Let’s note that Discovery has lost almost 11% of its value since the beginning of the year.

Idriss Linge