BUSINESS REPORTER
First Mutual Holdings swung into ZWL$1bn loss in the six months to June 30, 2021, from a profit of ZWL$4.79bn in the prior comparative period after it was hit by higher claims and fair value loss on investment property, board chairman Amos Manzai has said.
He, however, said the group will continue to diversify its real assets portfolio with investments in areas such as private equity, property, and foreign currency-denominated equities.
The group’s gross premium increased 71% to ZWL$5.4bn, from ZWL$3.1bn as a result of organic growth on the existing portfolio and the continuous revaluation of insurance policy values in line with inflation to ensure clients have adequate cover.
Investment property had marginal growth in US$ values determined as of 30 June 2021 and converted to ZWL at the prevailing auction rate.
However, the ZWL$ depreciated by 6% against an inflation movement of 21%, hence the fair value loss of ZWL$1.6bn to June 30, 2021.
Net investment income of ZWL$1.7bn was an increase of 79% against the same period in 2020 with the investment gains were driven by fair value gains on listed and unlisted equities in line with the general performance of the ZSE Industrial Index.
Total assets for the group appreciated in value by 2% from December 31 2020 to June 30 2021 due to the fair value adjustment on listed equities.
The group, through NicozDiamond, followed its rights in the recapitalisation of Diamond Companhia de Seguros, in Mozambique, with a capital injection of US$900,000, after June 30, 2021.
The capitalisation will result in the company exceeding the revised minimum regulatory capital to operate in Mozambique.
In the outlook, the group is bullish that the economy will recover, with growth projections of 7.8% in 2021 led by a recovery of the agriculture sector supported by monetary and fiscal stability.
Group CEO Douglas Hoto said the International Monetary Fund’s recent allocation of Special Drawing Rights to mitigate against the impact of Covid-19 will enhance recovery prospects.
The vaccination drive by the government is expected to further alleviate the impact of Covid-19 and result in the opening up of the economy.
Hoto said the group will continue to leverage on its diverse business portfolio, strategic partnerships, as well as its regional footprint to sustain a positive growth trajectory in the future.
Despite the uncertainties brought by the pandemic, the group’s solid balance sheet, coupled with a diversified business model, is expected to deliver sustainable growth and value creation for all the stakeholders.
On September 10, 2021, First Mutual board resolved that an interim dividend of ZWL$35m, being 4.82 cents per share, be declared from the profits of the company for the six months ended 30 June 2021.
The shares of the company will be traded cum-dividend on the Zimbabwe Stock Exchange up to October 5 2021 and ex-dividend as from October 6 2021.
