Restructuring and cost realignment pays off for ZHL in 2017
Insurance24
Harare, In 2016, Zimre Holdings embarked upon a restructuring exercise and adopted various cost re-alignment initiatives, resultantly that mirrors Group a strong performance achieved for the year ended 31 December 2017.
As part of the restructuring, the Group realigned assets to focus of the reinsurance and property business and was completed in 2017. This among other things saw ZHL exiting Nicozdiamond where it had a 30.03% stake as well disposed of its 62.23% stake in Colonnade Reinsurance Company. All reinsurance operations were consolidated under Emeritus Re and have since been rebranded.
Total income increased 20.40% to $37.2 mln from $33.5 million during prior year largely due to improved income from the property segment and steady recovery in the core reinsurance operations due to the restructuring.
Consequently, profit for the year recovered from a $1.5 mln loss in 2016 to close 2017 at $5.8 mln. According to Group Chairman Ben Kumalo’s statement of the financials, profitability was result of among others the significant turnaround at Emeritus Re (formerly Baobab Re) which adopted and implemented a prudent and selective underwriting strategy.
The group benefited from profits from disposals arising from restructuring and write-offs of reinsurance legacy liabilities.
Additionally, the group had a favorable claims experience in the regional markets where claims declined 32% from $4.8 mln in 2016 to $3.3 mln in 2017.
Kumalo indicated that the group’s aims to sustain the positive growth through consolidating and strengthening the capital base of the reinsurance operations under Emeritus brand. The group has also made investments in property development in particular the Victoria Falls shopping mall.
Last month group chief executive officer Stan Kudenga indicated that ZHL was targeting to raise $30 million before year end through a private placement on the Botswana Stock Exchange (BSE).
“The group will also adopt an aggressive debtors management and collection policy which is expected to result in narrowing of the levels of the debtors figures and improve investment income performance,” said Kumalo.
He said all five countries which the group has presence are expected to achieve growth in 2018, thus the group will continue to consolidate the gains from such markets.
