Fidelity Life moves to de-risk from Zim Market
HARARE, Fidelity Life Assurance says its strong balance sheet and diversified income streams provide offsetting stability and growth while its ability to de-risk from Zimbabwe by actively seeking opportunities in the region and beyond will also play a major role in prospects for the coming year.
While the board chair person Fungai Ruwende in a statement accompanying the FY 20202 results said the outlook for 2021 was difficult to forecast, he was optimistic that the management team had put in place strategies that will see the group prevailing despite these challenges.
“Importantly, our strong balance sheet and diversified income streams provide offsetting stability and growth. Our ability to de-risk from Zimbabwe by actively seeking opportunities in the region and beyond will also play a major role in our prospects for the coming year.
“We are continuing to invest for the future through the on-going development into technology to drive our business, make the lives of our customers better and create a leaner more efficient organisation,” he said.
During the period the group posted a profit before tax of ZWL$69.2 million on an inflation adjusted basis although inflation adjusted Group total revenue decreased by 47% from ZWL$2,180.7 million recorded in prior year to ZWL$1,150.0 million recorded in the current year.
The decrease in total revenue was as a result of a slump in investment income which decreased by 88%.
“Investment income is mainly driven by fair value gains on investment properties which are driven by the movement in exchange rate.
The subsidiary in Malawi continues to provide diversification relief to the Group against the unstable currency movements in Zimbabwe. Inflation adjusted Group total expenses decreased by 41% from ZWL$1,822.0 million recorded in prior year to ZWL$1,080.7 million in the current year.
The Group recorded major savings on the South view water pipeline works which resulted in project development costs decreasing by82% from ZWL$488.9 million prior year to ZWL$79.7 million current year.
However, operating expenses decreased by a much lower 31% from ZWL$366.0 million to ZWL$252.4 million recorded in the current year.” Ruwende said.
The Group’s total assets increased by 19% in real terms from ZWL$4,600.7 million as at 31 December 2019 to ZWL$5,473.6 million as at 31 December 2020.
The asset growth was driven by investment property and equity investments which account for 70% of the group’s total assets.