LIVINGSTONE MARUFU
Diversified group Zimre Holdings Limited (ZHL) is optimistic that its regional operations will continue to protect the company’s balance sheet against the volatile Zimbabwe economic environment and the adverse effects of the ravaging Covid-19 pandemic.
ZHL reported a solid performance in 2020 significantly benefiting from regional operations.
The group’s board chairman, Ben Kumalo said the regional operations contributed 57% in gross premium written (GPW) during the reviewed period from 64% in 2019.
The regional diversification strategy, Kumalo said, became handy as the impact of the Covid-19 pandemic on group performance was less severe. The group operates units in Botswana and Mozambique.
Kumalo is hopeful the regional operations would continue to protect the company’s balance sheet against the volatile Zimbabwean environment and also earn foreign currency for the group.
Total income grew 11% to ZWL$2.8bn from ZWL$2.5bn achieved in 2019 buoyed by a strong performance in Mozambique and Botswana.
“The increase was mainly driven by the strong topline growth in premium income in Botswana and Mozambique as the units consolidated their respective market positions, the growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency,” Kumalo said.
He added: “The contribution mix is underpinned by the clawback in the Zimbabwean operations and the continued beneficial hedging effects of the regional operations and positive performance was driven by strong business growth in Botswana and Mozambique.”
Profit for the group rose to ZWL$900m in 2020 from the ZWL$500m registered in 2019, attributed to the strong top-line business growth in some business units and the investment portfolio fair valuations following the change of the functional currency in Zimbabwe.
There was also growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency.
Total claims and expenses, Kumalo said declined by 27% to ZWL$1.4bn in 2020 from ZWL$1.9bn in 2019 . The decrease was driven by an overall decline in operating expenses, acquisition costs and claims.
Total assets grew by 154% in inflation-adjusted terms from ZWL$4.9bn.
The group’s financial position remained sound mainly due to the revaluation of investment properties and other non-monetary assets.
The positive cash flows were generated from most operations mainly due to the strong business growth momentum achieved and leasing of space to quality tenants.
The implementation of premium warranty policies in certain markets and strengthening of the effects of moderate improvements in credit control functions in most business units also contributed to positive cash flows, Kumalo said.
