NicozDiamond posts US$1,67m profit

percent to US$23,5 million as the economy continues to recover and in the back of good performance of the group’s associate firms.
Earnings per share for the period came in at US0,29c and the positive performance saw the group declaring a dividend of US0,046 cents, amounting to a payout of US$259 347.
NicozDiamond said the dividend was in appreciation of the shareholders’ strong support in difficult times. In 2009 the group raised US$4 million through a rights issue to strengthen its capital base. The improved results included the share of associates of US$290 000 from 45 percent-owned Clover Leaf Panel Beaters and 23,9 percent-owned Fidelity Funeral Assurance Company.
Also included in the financials is the share of 15 percent-owned Diamond General Insurance of Zambia and fees for management and technical services contracts in Angola, Malawi, Zambia and Uganda.
NicozDiamond posted an increase in profits despite a 33 percent surge in claims after a significant number of fire and engineering claims were paid in the second half of the year.
Chairman Mr Albert Nduna said net claims, including acquisition costs, totalled US$8,9 million in the period under review from US$6,9 million over the comparative period in 2010. But operating and administrative costs (excluding retrenchment expenses) showed a downward trend, falling by 7 percent. Retrenchment costs during the year totalled US$185 238.
This saw the company maintaining its claims paying ability of (A-), as rated by Global Credit Rating of South Africa, which is done annually and has not changed over the years. “Despite the magnitude of the claims (paid) the company was able to pay out all these claims in full and restored its clients to their original positions within reasonable timeframes,” he said.
Mr Nduna said despite the liquidity crunch facing the economy and the insurance industry the group could still record commendable turnaround after underwriting profits while property units, Thirty Samora Machel and Marabou Investments, made meaningful contributions.
The group said liquidity challenges notwithstanding, there still was potential for more business, which is currently untapped due to liquidity constraints and capacity under-utilisation.
“The group remains optimistic about the continued recovery of the economy and resultantly an improvement in the performance of the economy,” said Mr Nduna.
Zimbabwe’s economy has endured the brunt of the liquidity crisis, which has affected most companies and the economy’s general potential for faster growth following almost a decade of instability.
The group’s balance sheet grew by 14 percent during the year and with capital at US$7,9 million stands well above the Insurance and Pensions Commission’s minimum of US$300 000.