Old Mutual profit soars after cost cutting

City A.M. Reporter
Anglo-South African financial conglomerate Old Mutual reported a better than expected 43 per cent jump in half-year profit, helped by cost cuts, and said it had sold its US life unit for $350m (220 million pounds).

Old Mutual had an IFRS operating profit of £735m in the first six months of 2010, up from 513 million pounds a year earlier, it said.

Analysts had expected a profit of £681m, according to the company's calculation of consensus expectations.

The improvement was driven in part by cost cuts as Old Mutual took out £42m in expenses out of a total target of £100m.

The company also benefited from a pick up in revenues, with sales climbing 28 per cent to £814m.

"We are confident about the outlook for the full year although market uncertainties remain," Old Mutual chief executive Julian Roberts said in a statement.

Old Mutual also said it had agreed to sell its U.S. life business to hedge fund Harbinger Capital Partners for $350 million.

The company put the U.S. life business up for sale in February as part of an effort to simplify its sprawling structure.