ZIMRE Holdings profit in massive jump

ZIMRE Holdings profit in massive jump

HARARE, ZIMRE Holdings after tax profit for the six months period to June 30, 2019 recorded a massive jump to $117,6 million compared to $766 832 in 2018 same period driven by profitability across its operations.

Benjamin Khumalo, the group chairman, said profitability at Zimre Property Investments (ZPI,  domestic insurance operations and the group’s associates as well as positive claims experience were in the mix for the group’s perfomance.

“Overall profitability was anchored by profitability at ZimRe Property Investments following fair value gains on revaluation of investment property, rental reviews and US$ denominated revenue from sale of inventory property,” he said.

He added that significant business growth in reinsurance also contributed positively, particularly in the Mozambican operation.

“Limiting factors were however noted in the domestic environment where businesses were adversely affected by the rising operational costs in line with surging inflation and erosion of consumer disposable incomes,” said Khumalo.

During the period under review, total income was increased to $167,1 million compared to $14,9 million in 2018 on account of the continued business growth in the reinsurance operations.

“Especially in the regional subsidiaries which contributed 68 percent of the premium written, and letting of high value rental space by ZPI,” he said.

 

Claims and expenses amounted to $40,6 million in 2019 compared to $14,2 million and the increase in total expenditure was largely driven by inflationary factors and foreign currency exchange losses in the domestic environment and negative claims experience in Zambia and Malawi.

 

As at June 30, 2019, total assets were at $433,5 million on the back of the revaluation of properties and monetary assets while shareholders equity was at $194,6 million on the back of profitability, the acquisition of additional stake in ZPI, revaluation of properties and change of functional currency.

 

Khumalo said the group is currently undertaking the identification and shortlisting of potential investors as well as obtaining the requisite Zimbabwean regulatory and shareholder approvals for the capital raise initiative.

The capital raise is expected to unlock the full potential of the regional operations in terms of growth and performance after competitive capital has been raised.

 

ZHL’s other subsidiaries, CFI remains suspended from trading on the Zimbabwe Stock Exchange (ZSE) as the governance issues highlighted by the regulatory authorities have not yet been finalised.

 

“It is however, pleasing to note that the retail operations of the CFI Group continued to register strong performance and profitability,” he said.