First Mutual Holdings Limited’s first quarter profit was up 616% year on year, underpinned by improved income in an unsteady operating environment.
Profit for the period stood at $17.6 billion.
“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,” the company said in a trading update.
“Despite the volatile operating environment, First Mutual Holdings Limited attained higher business levels in the core insurance units as well as increased revenue in the investment property and micro-lending units.”
Comparing the current period to the same time last year, insurance contract revenue increased by 497% to $25.9 billion.
“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 USD for value restoration in case of the occurrence of an insured event,” the company said in a trading update.
“The proportion of the USD business being written by the Group, constituted 53% of the total insurance contract revenue at USD14.7 million compared to 54% in the same period last year.”
The insurance service result grew by 446% to $3.8 billion 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 growth of the net reinsurance revenue,” it said.
In the period, rental income grew by 584% to $1.4 billion.
“The growth arose from a combination of factors which included a higher proportion of USD denominated leases as well as inflation driven on ZWL rental rate increases.
“The occupancy levels stood at 84.55% compared to prior year of 89.99% and the average rental/square metre was USD4.73 compared to prior year of USD4.61.
“The overall group net investment returns amounted to $7.9 billion, 159% above prior year. The growth was driven by recoveries on the ZSE,” it said.
By keeping its goods relevant and following through on its promises, the group will work to maintain a compelling value offer for customers and achieve sustainable operations.
“We will also pursue value enhancing initiatives such as investments in real assets in order to preserve and grow the balance sheet in the current hyperinflationary environment.” – Harare