Interim reports | Mandatum’s investment income collapsed at the end of the year – the stock is sinking

Life insurer and asset management company Mandatum’s October–December profit before taxes fell to 46.3 million euros from 62.6 million in the comparison period.

According to the company, the decrease from the comparison period was due to a weakened investment result.

The result of investment activities was 24.9 million euros, while a year earlier it was 78.1 million euros in the comparison period.

Mandatum managing director Petri Niemisvirta reminded in the financial statement bulletin that the changes in the value of the investments with the discount rate base are visible when the interest rates change, even as a large variation in the result of the investment activities in different quarters.

“This is part of the nature of the life insurance business.”

The premium result more than doubled in October–December to 13.4 million euros from the comparison period.

The fee result includes, for example, fees from investment contracts and income from investment-linked insurance policies.

The result of risk life insurance was EUR 8.0 million.

If a year the last quarter was weak in terms of investment returns, for the whole year the profit before taxes increased significantly. The result was now 210.4 million euros, while in the comparison period it was 75.7 million euros.

“All areas of the result grew from the comparison period, and the result of investment activities in particular grew strongly,” the company stated in the financial statement bulletin.

For Mandatum the important net cash flow in 2023 was 753.8 million euros, i.e. more than seven percent of managed customer assets.

Mandatum aims for five percent in the medium term, so the goal was exceeded.

CEO Petri Niemisvirta characterized Mandatum’s 2023 result as “excellent”.

“The good development in the capital-light business at the core of Mandatum’s strategy materialized in the growth of both net cash flow and fee income,” Niemisvirta said in the press release.

Financial management 75 percent of new sales came through business cooperation.

The premium result was 52.6 million euros in 2023.

Mandatum says that it expects the fee result to increase in 2024 from 2023, assuming that market conditions remain stable.

Managed customer assets grew by 15 percent during the calendar year to a record 11.9 billion euros.

The investment result almost tripled to 148.6 million euros from 50.5 million euros in the comparison year.

The result of risk life insurance was 17.9 million euros.

Mandate separated from Sammo in the fall of 2023 through a partial demerger. Trading in Mandatum shares started on the Helsinki Stock Exchange on October 2.

Measured by the number of shareholders, Mandatum is the third most popular company on the Helsinki Stock Exchange.

Mandatum’s board proposes to pay a dividend of EUR 0.33 per share for last year. Unlike before, the board proposes May 24 as the dividend payment date.

Investors received the company’s results with disappointment. The stock was down almost four percent at midday.

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