FIRST Mutual Holdings Limited (FMHL) overturned its loss-making position to post a profit-after-tax of ZWL386,37 billion in the half year ended June 30, 2023, after realising a net gain of nearly 262% from its investment property re-evaluation. In the comparative period last year, the financial services firm posted a near ZWL$2 billion loss.
During the period under review, FMHL recorded a net gain from fair value adjustments to investment properties of ZWL$510,34 billion, up nearly 262% from the comparative 2022 period.
This was owing to the Zimdollar depreciation of nearly 80% during the period to US$1:ZWL$5 739,79 at the end of June, from the 2022 comparative of US$1:ZWL$370,96.
“The group achieved a profit for the period of ZWL$386,4 billion which represented a 19 409% increase relative to the prior year (a growth of 1 330% to ZWL$486,7 billion compared to the prior year in historical cost terms),” FMHL chairperson Amos Manzai said in a statement attached to the group’s financial statements.
“The increase is attributable to the increases (in) rental income, net fair value gains in investment properties and listed equities.”
Investment property was revaluated to ZWL$858,14 billion during the period under review, from ZWL$347,67 billion at the end of 2022.
The net gain on its investment property valuation led to total assets rising to ZWL$1,36 trillion as at the end of June, from ZWL$606,41 billion recorded at the end of 2022.
“During the period under review, insurance contract revenue (ICR) at ZWL$199,5 billion, grew by 105% compared to prior year (a growth of 750% to ZWL$106,4 billion compared to the prior year in historical cost terms),” Manzai said.
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“The growth in comparison to the same period last year was largely driven by the continued revaluation of ZWL insurance policy values to ensure adequate cover for clients as well as a migration of more policies to the US dollar (United States dollar) for value restoration in case of the occurrence of an insured event. The proportion of the US dollar business being written by the group constituted 74% of the total ICR at US$45,8 million.”
He said rental income grew by 117% to ZWL$7,9 billion compared to prior year.
The overall group net investment returns amounted to ZWL$109,3 billion, 1 701% above prior year.
“The positive investment outturn was mainly due to fair value gains on the ZSE and the ZWL$ depreciating at a faster rate than the US dollar fair value losses on the VFEX [Victoria Falls Stock Exchange],” he said, adding that FMHL would continue to pursue value enhancing initiatives such as investments in real assets to preserve and grow the group’s net assets.
