Old Mutual profits jumps 82%

Published: 02 September 2013

OLD MUTUAL Investment Group Zimbabwe has recorded an 82% increase in after-tax profit to $1,4 million for the six months ended June 30 2013 compared to $763 000 during the comparative period last year.

The jump in profits has been attributed to strong stock market performance and cost containment measures.

Despite achieving growth in revenue, operating and administrative expenses rose to $1,6 million from $1,4 million while other expenses increased to $29 129 from $14 910 on the same period last year.

In a statement accompanying the group's interim results for the six months ended June 30, Old Mutual Investment Group Zimbabwe chairperson Kennedy Mandevhani said the retail sector dominated economic activity primarily due to the increasing consumptive nature of the economy.

Mandevhani said due to low levels of production, the country increased imports in order to cover local production deficits and as a result the economy's trade deficit declined and this worsened the money supply in the country.

The group's turnover increased by 44% to $3,530 million for the six months ended June 30 2013 as compared to $2,456 million recorded over the same period last year.

"Growth in profitability was on the back of a strong stock market performance and the results of cost containment measures implemented by management," Mandevhani said.

He said the company's combined capital and reserves stood at $3,095 million as at June 30 in line with the regulators' minimum capital requirements which were set at $500 000.

However, Mandevhani said the business environment for the first half of 2013 was characterised by a slowdown in economic activity.

He said the benchmark the Zimbabwe Stock Exchange industrial index recorded a strong performance of 38,6% during the first half of the year driven by the positive sentiments following the adoption of a new Constitution and strong earnings performance from large capitalised companies.
- southerneye

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