Zimre income bulks 554 percent

Business Reporter

Zimre Holdings (ZHL) says total income for the five months to May 2023, grew 554 percent to $22,36 billion from $3,42 billion in 2022, driven by an increase in United States dollar revenue inflows from local entities from 35 percent to 65 percent.

Stanley Kudenga, the group’s chief executive, told shareholders at the annual general meeting that given the volatility of the Zimbabwe Dollar, it is expected that the local business unit’s core revenue lines, particularly general insurance, reinsurance and property, will continue to predominantly generate USD.

Kudenga said the group’s regional operations remain a key strategic investment and a hedge against a volatile local business environment.

He said regional reinsurance operations contributed 54 percent to the group’s total gross premium written (GPW) and 36 percent to total income.

“Emeritus Re Mozambique and Malawi posted significant contributions to regional performance at 48 percent and 21 percent, respectively,” he said.

Kudenga said in line with the group’s intention to strengthen regional operations underwriting capacity, ZHL has secured regulatory approvals to inject capital into Emeritus Re Mozambique, with the first payment having been successfully deployed to the unit.

“Similarly, the group recently obtained approval to amalgamate its Botswana operations under Emeritus International,” he said.

The group’s life and pensions cluster contributed 31 percent to the group’s total income, while local reinsurance and reassurance operations contributed 23 percent.

“The growth in the life and pensions cluster was driven by individual life premiums through the great success of the Vaka Yako product,” he said.

He noted that local reinsurance operations recorded an improved claims experience, which decreased by 49 percent compared to 2022, while reassurance operations recorded a 51 percent improvement.

Kudenga said the group’s property portfolio recorded 510 percent growth in total rental income, contributing 5 percent to the group’s total income on account of the conversion to USD leases, indexation, and realignment of lease agreements to optimize value from rental properties.

However, despite the challenging environment, ZHL Group posted an operating profit growth of $4.01 billion from $411 million in the prior period.

Kudenga said the group has registered a Real Estate Investment Trust (REIT) named Eagle REIT, which will be launching two developments in Mazowe and Victoria Falls.