First Mutual reports solid Q1 2023 performance
BUSINESS REPORTER
Financial services group, First Mutual Holdings Limited (FMHL) reported a solid financial performance in the first-quarter of this year on the back of high sales volumes across all its units.
In a trading update for the quarter to March 31, 2023, FMHL company secretary Sheila Lorimer said the group continued revaluation of insurance policy values to match inflation and exchange rate movements.
She said the organisation migrated more insurance policies to the United States dollar to ensure value preservation in a volatile environment.
“Despite the volatile operating environment, FMHL attained higher business levels in the core insurance units as well as increased revenue in the investment property and micro-lending units. The migration from local currency to the United States dollar transactions continued in the period under review for all local subsidiaries, particularly for the general insurance and reinsurance businesses due to the volatility of the Zimbabwe dollar,” Lorimer said.
During the period under review, revenue from insurance grew 497% to ZWL$25.9bn in the period under review compared to the same period in the prior year.
Lorimer said the growth was driven by the continued revaluation of insurance policy values to match inflation and exchange rate movements to ensure adequate cover for clients as well as a migration of more policies to the United States dollar for value restoration in case of the occurrence of an insured event.
The proportion of the United States dollar business being written by the group constituted 53% of the total insurance contract revenue at US$14.7m compared to 54% in the same period last year.
“The insurance service business grew by 446% to ZWL$3.8bn compared to the prior period.
“The growth is a result of increases in the insurance contract revenue as well as improved retention of the same as demonstrated by the growth of the net reinsurance revenue,” she said.
During the period under review, rental income grew by 584% to ZWL$1.4bn and the growth arose from a combination of factors which included a higher proportion of United States dollar -denominated leases as well as inflation driven on Zimbabwe dollar rental rate increases.
The occupancy levels stood at 84.55% compared to the prior year of 89.99% and the average rental per square metre was US$4.73 compared to the prior year of US$4.61.
The overall group net investment returns amounted to ZWL$7.9bn, 159% above the prior year.
The growth was driven by recoveries on the Zimbabwe Stock Exchange.
The group achieved a profit for the period of ZWL$17.6bn, reflecting a 616% increase from the prior comparative period.
The increase is attributable to the increases in insurance contract revenue, rental income, net fair value gains in investment properties as well as net investment return due to some recovery in our listed equity portfolio.
