Zimre Holdings Limited (ZHL), saw its profits growing by 1 137% to $2,7 million in the half-year ended June 30 from the comparable period last year, as the financial services group reaps from its restructuring exercise.
The group is strengthening its reinsurance business investments in Mozambique and Zambia
In the same period last year, ZHL posted a profit of $200 000.
The performance was achieved despite a loss of $1,7 million arising from the restatement to fair value less cost to sale of the investments in Nicoz Diamond and Fidelity Life, which were reclassified as non-current assets held for sale as at June 30, board chairman, Ben Kumalo said in a statement accompanying the financial results.
Kumalo said the restructuring, which started last year, focused on prudent and selective underwriting in the core reinsurance operations and better management and alignment of costs to revenue in a soft insurance market.
“Claims were the major line that recorded a noticeable reduction of 10% from $3,7 million in 2016 to $3,4 million in 2017 reflecting improvements in risk management standards,” he said.
The growth in profitability was also attributable to recovery and noticeable improvements in business pipeline in key reinsurance operations following restructuring, the winding up of business at Emeritus South Africa to stem further erosion of capital, the partial write off of some reinsurance legacy liabilities following negotiations with retrocessionaires and gains from disposal of listed investments and fair value gains on listed investments.
Total income was 3% up to $15,7 million in the period under review. Kumalo said the slow growth in income was reflective of the difficult operating environment, reduced demand for insurance products due to low disposable income and declining rentals attributed to increased voids.
In the outlook, Kumalo said the group would continue to consolidate the benefits of restructuring and realignment initiatives to ensure that profitability is sustained into the foreseeable future.
“The group is strengthening its reinsurance business investments in Mozambique and Zambia and is positioning itself to tap into the immense growth potential in those markets that will further uplift its performance in the near future,” he said.
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