By Tatenda Mujeyi
ZIMRE experienced mixed fortunes in its 2019 first quarter operations which were 12 % below budget owing to policy shifts and the challenging economic environment.
The group noted that the policy arrangements that were drawn following the monetary statement of February had changed the operations within business reporting standards.
“I must hasten to say that due to reporting challenges in Zimbabwe following the 20 F February policy statement, comparative analysis of the results has become difficult and this update will focus on presenting the Group performance against budget,” ZIMRE Holdings Group Chief Executive Officer Stanley Kudenga said at the event.
The group experienced a below budget profit in the first five months that was mainly driven by the property business.
“Group total revenue for the first 5 months of 2019, at ZWL 31.3 million was 12% below budget mainly due to subdued group investment income and lower stand sales from ZimRe Property Investments (ZPI),” Kudenga said.
“The Group’s insurance and reinsurance business clusters contributed 82% of the total revenue whilst the property business clusters contributed 82% of the total revenue whilst the property business clusters accounted for 17% of the revenue.,” he said.
Despite the challenges the company faced remained profitable despite the turbulent economic experiences.
“The group remained profitable with profit before tax coming at ZWL 5.2 million, which was 32 % above budget. This encouraging level of profitability was mainly due to (I) lower business acquisition costs; (ii) an overall favourable claims experience and (III) exchange gains.”
The regional business remains key to the future growth of the group and contributed 51% of the group total revenue in the first 5 months of the year.
The group further noted the need to capitalise their regional business for the company to realise the potential maximum profits.
“We however believe that the regional business’s full potential will only be realised with full capitalisation. A process is currently underway to achieve this. With increased capital the regional operations will enhance underwriting capacity; increase retention; enhance credit ratings; facilitate expansion to other markets and support.”
The group emphasised their intentions to explore new revenue lines through “expansion into existing value chains and complementary business with synergistic linkages to the core operations.”