ZHL remodeling to boost investment
Nelson Gahadza, Senior Business Journalist
ZIMRE Holdings is confident that the reconfiguration of its operations would spearhead investments with a significant impact on the economy.
ZHL focused more on insurance – focused on building wealth through investment banking activities in strategic national developments.
The new model has resulted in the restructuring and reshaping of the group’s business portfolios in accordance with its new culture, which “emphasizes value creation supported by cash generation, customer focus and change management. “.
Mr. Benjamin Kumalo, chairman of the group, in a financial statement for the half-year to June 30, 2021, said that while ZHL’s DNA lies in insurance and real estate, 2021 saw the group reposition itself to include the creation and management of wealth both for its shareholders and the communities in which it operates.
“The group is undergoing a major restructuring which includes the integration and reorganization of Fidelity Life Assurance to ensure the company is focused on its core business, business acquisition and innovation. “, did he declare.
ZHL acquired a majority stake in Fidelity, a company it unbundled in 2003, through a
share purchase agreement with the National Social Security Authority (NSSA) for its 35.09% stake in Fidelity.
The diversified insurer then held a 20.57% stake in the life insurer and the acquisition enabled ZHL to become the majority shareholder of the company with a 55.66% stake.
Fidelity operates three insurance companies, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services and has several other subsidiaries involved in the provision of microcredit, medical assistance, asset management and actuarial services. The company is also involved in real estate development.
Mr. Kumalo said the group is also reorganizing its regional reinsurance operations, which will have a positive impact on their competitive capital.
The group has reinsurance operations consolidated under Emeritus International in the region in countries such as Botswana, Mozambique, Zambia and Malawi.
ZHL, according to Mr. Kumalo, is also reconfiguring business units to anchor and propel wealth management activities that will have a significant impact on investments in the economy.
Its subsidiary, Zimre Capital, has since been mandated by the government to conduct a feasibility study and raise capital for the Beitbridge, Bulawayo, Victoria Falls highway project.
At the same time, for the interim period under review, group premiums increased 102% to $ 2.4 billion, from $ 1.2 billion for the same period a year earlier, largely due to increase in insurance income.
According to the company’s financial data, total insurance revenue increased 111% to $ 1.7 billion from the previous year, while total revenue decreased 32% to $ 2.1 billion. dollars due to a 123% decrease in fair value adjustments on investment property.
Mr Kumalo said spending fell from $ 933 million to $ 2.3 billion, largely due to inflationary pressures on operating and administrative expenses and one-time restructuring costs as a result. the successful delisting of Zimre Property Investments (ZPI).
As a result, the loss before income tax for the period was $ 524.9 million compared to a profit of $ 2.59 billion in 2020.
“The pre-tax loss is attributed to the impact of the actuarially determined gross change in insurance and investment contract liabilities and the impact of the net loss on the monetary position,” he said.
He noted, however, that the group made a profit over the period of $ 465 million in historical terms.
Mr Kumalo said the group’s assets fell 0.7% to $ 14.94 billion during the period under review while total equity fell to $ 6.6 billion from $ 6 billion. $ 94 billion as at December 31, 2020 due to loss incurred in the six-month period to June 30, 2021. Cash and cash equivalents for the period increased 21% to $ 1.7 billion during the period under review, in line with the group’s strategy to generate liquidity for operational and investment purposes.