Zimre Holdings' profit declines by 40%

Published: 06 May 2014

Integrated financial services group Zimre Holdings Limited (ZHL) has recorded a profit before tax of $2,7 million in 2013, which is 40% less than the $4,4m it recorded in 2012.

In its latest financial statement for the year ended 31 December, 2013, ZHL achieved a marginal 3,4% growth in 2013 down from the projected 5% owing to a cocktail of constraints.

Among the problems that curtailed growth were diminishing consumer demands, liquidity constraints, high cost of borrowing, absence of significant foreign direct investment (FDI) inflows and declining capacity utilisation.

Revenue growth was however buoyed by agriculture, mining and infrastructure projects in Malawi, Zambia and Mozambique from which the group derived average 6% revenue.

"The group's performance remained positive with most operations posting positive results. The gross premium written (GPW) was equivalent to that of the previous financial year at $76,9m.

"Domestic operations contributed 57% of the GPW as compared to 53% in 2012," ZHL said.

ZHL achieved a total comprehensive income of $110m in 2013, with $10,2m coming from share revaluation of land in one of the group's key associate companies following the incorporation in July 2012 of the land into the greater Harare Municipal boundaries, which is now being developed into high density residential facilities.

The financial position of the group grew from $138,2m in 2012 to $154,9m in 2013 while shareholder funds increased from $47,4m in 2012 to $55,3m in 2013.

The group was not in the best financial position to recommend any dividend as there was need to conserve cash.

To enhance the underwriting capacity and improve liquidity and working capital the group has signalled undertaking capital raising exercises.

"The group is also restructuring its portfolio with the view of disposing non-performing and non-core investments and wide ranging cost cutting measure," ZHL said.

The group said the new financial year would be driven by agriculture and mining.
- Zim Mail

Tags: Zimre,