×

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

  • Marketing
  • Digital Marketing Manager: tmutambara@alphamedia.co.zw
  • Tel: (04) 771722/3
  • Online Advertising
  • Digital@alphamedia.co.zw
  • Web Development
  • jmanyenyere@alphamedia.co.zw

First Mutual sees red in 2024 H1

FMHL chief executive officer Douglas Hoto

FINANCIAL services firm, First Mutual Holdings Limited (FMHL), posted a loss of nearly US$33 million for the half year ended June 30, 2024, owing to exchange rate distortions.

The loss was from a profit after tax of US$56,32 million over the 2023 comparative period.

In a statement attached to the financial results for the half year ended June 30, 2024, FMHL group chairperson Amos Manzai said how the forex distortions led to the massive loss.

“The conversion of the first half results and prior year figures was done in compliance with IFRS [International Financial Reporting Standards], which may deviate from the underlying financial performance as tracked by management for decision making purposes.”

He said insurance contract revenue increased by 160% compared to the prior period mainly due to the IFRS—related distortions that result in the understatement of the revenue for 2023.

Insurance contract revenue for the period under review was recorded at US$73,53 million, compared to the 2023 comparative of US$29,08 million.

“During the period under review, the group incurred a loss after tax of US$33 million compared to a profit of US$56 million. The significant drop from prior year stems from distortions arising from following the provisions of IFRS,” Manzai said.

“Major distortions to the group’s performance were noted on investment property which was valued in the prior year in ZWL which when translated to US dollar, following IFRS guidelines, resulted in a valuation of US$178 million on 31 December 2023 compared to the independent US dollar valuation of US$128 million.”

He said this was the driver for the fair value loss on investment property of US$50 million.

The investment property distortions led to the group’s total assets being recorded at US$227,44 million during the period under review, down from US$286,98 million recorded at the end of last year.

Despite the overall loss to the group, the firm managed to overturn a 2023 half year loss in its net insurance and reinsurance performance of US$34,98 million to a gain of US$32,46 million in the period under review.

“The first half of 2024 was characterised by the continued increase in the use of the US dollar for transacting purposes. There was significant depreciation of the local currency in the first quarter of the year. At the beginning of the second quarter of 2024, the government replaced the ZWL with the Zimbabwe Gold, a hard asset backed currency,” FMHL chief executive officer Douglas Hoto said.

“The group focused on maintaining the relevance of its products in the core pillars of risk management, wealth creation and wealth management. There was an increasing preference by clients for US dollar-denominated products to ensure that the value of the insurance benefit was retained. Eighty-three percent of the group’s insurance contract revenue was in US dollars for the six-months ended 30 June 2024.”

He said the existing economic environment required continuous engagement with customers to maintain the relevance of our products.

“The solid financial position of the group, coupled with diversified revenue streams as well as the growing contribution of regional businesses, is expected to contribute towards sustainable growth and value creation for our stakeholders,” Hoto said.

He said FMHL would continue investing in technology to improve service delivery channels and product innovations as part of its strategy to meet evolving market requirements.

Related Topics