Zimre in profit slump

Michael Tome
HARARE – Diversified financial services group, Zimre Holdings Limited recorded a 68 percent slump in profit for the year ended 30 June 2018.

The group’s profit dipped by $2,1 million to $992 166 from $3, 1 million recorded in the same period last year.

This development comes despite the 5, 5 percent reduction in the group’s expenditure to $14, 2 million from $15 million realised in the same period last year.

Zimre Holdings Limited chairman Benjamin Kumalo said decline in the group’s profitability is largely attributed to the property subsidiary, Zimre Property Investments Limited’s (ZPI) drive to diversify into property classes with higher rental yields. This entailed disposal of a CBD property and conversion of another necessitating construction and refurbishment amongst other notable reasons.

“Total income declined by 14 percent from $17, 3 million to $14, 9 million in the period under review, mainly due to the impact of property portfolio restructuring at ZPI.

“The period under review coincided with construction and refurbishment of the said property which triggered a significant but temporary reduction of rental income from the investment property portfolio,” said Mr. Kumalo

He however assured the company’s rebound to better profitability in the first three months next year

 “This position is expected to be corrected in the first quarter of 2019 when the additional space is released for renting,” he added.

By June this year ZPI had already made a $6 million investment towards the construction of Sawanga shopping mall in Victoria Falls in a move to diversify income.

When completed the Sawanga mall which is currently under construction in Victoria Falls will contribute annual net rentals that will be over 10 percent above those realised from the disposed Zimre Centre in Harare.

Zimre Holdings highlighted high claims experience for the Mozambican operation arising from floods, inadequately funded nostro accounts, price distortions and increased cost pressures as some of the challenges that constrained business growth and the group’s operations.