Property and equity investment portfolios gains boost Fidelity H1 turnover

Property and equity investment portfolios gains boost Fidelity H1 turnover

 

Staff Reporter

HARARE, Fidelity life Assurances’ (Fidelity Life) total revenue grew by 143%, closing the half year at ZW$62,5M, compared to ZW$25,8M same period last year driven by fair value gains on the Group’s property and equity investment portfolios.

The value gains of ZW$29,9M were recorded during the period and Fidelity life chairperson  Fungai Ruwende said in the statement of results that  whereas an interim revaluation of properties was previously not performed for half year reporting, the macro-economic developments noted during the half year to 30 June 2019 necessitated this assessment.

Revenue was also boosted by profits from disposal of construction equipment which resulted in a 392% increase in other income to ZW$4,7M from ZW$0,9M  to ZW$4,7M.

Equities portfolio recorded gains of ZW$4,1M, compared to a loss of ZW$1,2M recorded in the 6 months to 30 June 2018.

During the period the Group’s premium income increased 84% to ZW$16,6M, from ZW$9,1M in the period to 30 June 2018 with the Malawi business being the key contributor.

Revenue from sale of stands was negligible as expected due to the South view development project having reached its tail end.

Ruwende said a provision for re-estimated project completion costs for South view offsite works was a major contributor to the 162% increase in total expenses.

“The contract value was adversely affected by the developments noted in the macro-economy following the pronouncement of SI 133 and SI 142.

The re-estimation of the project completion costs resulted in a ZW$22.8M charge to the income statement.

 

The significant gains reported from fair value and exchange rate adjustments resulted in a 237% increase in gross change in insurance and investment contract liabilities, which increased from ZW$5.1M to ZW$17.1M in the current half year.

 

Other expenses grew largely due to inflationary pressures and the exchange rate impact on the operating results of the Malawi business,” he said.

The Group closed the half-year with a profit before tax of ZW$4.6M, against a comparative of ZW$3,7M, reflecting a growth of 24%.