ZHL restructuring pays off
Zimre Holdings Limited (ZHL) generated ZW$10.6 billion in total income in the year ended 31 December 2021, a 137% growth from the prior year largely as a result of the new structure.
In 2021, ZHL Group began the process of restructuring and repositioning itself to include wealth creation and management both for its shareholders and the communities within which it operates.
This included the integration and reorganisation of Fidelity Life Assurance of Zimbabwe Limited to ensure the business focuses on core business, business acquisition and innovation.
The Group also embarked on restructuring its property portfolio and initiating new strategies to ensure portfolio optimisation.
In a statement accompanying the financial statements for the year ended December 31 2021, ZHL group chair Ben Kumalo said Gross Premium Written (GPW) increased from ZWL3.4 billion to ZWL5.2 billion, a 53% growth from prior year.
Rental income contributed 3% of the Group’s total income at ZWL294 million from ZWL144.1 million in the prior year.
“The increase was in spite of disparities in growth of investment property values and rental income as well as a direct consequence of the anticipated cost saving from de-listing the Group’s property arm.
“In its year of reflection, concerted effort was given to implementing appropriate responses to the pandemic. These responses included robust initiatives to investments, resulting in notable growth in investment income of 269% to ZWL171.6 million,” he said.
“Also among the key responses were prudent and tough decisions on costs given both the pandemic and inflation in Zimbabwe.
Total Expenses were therefore ZWL6.44 billion being a 186% increase from prior year and the cost to income ratio dropped from 50% to 41%, a creditable performance given the circumstances.”
The Group recorded a profit of ZWL2.8 billion (2020:ZWL1.6 billion) despite insurance benefits and claims increasing by 107% and operating and administrative expenses growing by 502%.
Kumalo said the Group acknowledged the difficult operating environment,
“Notwithstanding, the Group will continue to pursue its new DNA of being a Financial Services Group with core competencies in Insurance, Property and Wealth Management.
The strategy will be anchored by robust investment initiatives, continued consolidation of operations to capitalise on economies of scale while eliminating duplication of costs, and exploring strategic partnerships both locally and
regionally to enhance its market presence,” Kumalo said.
Following the consolidation of the Group’s heartland investments, Kumalo said the Group will be developing an overarching and formalised policy to Environmental, Social Responsibility and Corporate Governance.
The policy is expected to will encourage the sharing of ideas to ensure that best practices are implemented in a coordinated manner across all the operations to create sustainable economic value.
“The new consolidated structure has also made culture a real focus of the Group.
“The Group has therefore adopted a uniform culture that builds on the opportunities of 2020, to align the organisational purpose, strategic values and leadership behaviours.
“The culture transformation is expected to result in a positive effect on the Group employees and in turn its success,” Kumalo said.