First Mutual bolsters investment portfolio
FIRST Mutual Holdings Limited is committed to real estate investment as a strategy for preserving value and maintaining market relevance, according to its financial statement for the year ending December 31, 2023.
Despite economic obstacles, First Mutual sees great potential in Zimbabwe’s real estate sector and is focused on offering “real returns” on investments.
The company’s chairman, Mr Amos Manzai, reported a 199 percent rise in rental income, primarily due to a shift towards US dollar-denominated leases and inflation adjustments for local currency rentals.
Although there was a slight decrease in occupancy to 76,7 percent from 85,52 percent, the context of new investments resulted in increased available space. The average rental income per square metre also increased to US$5,29 from US$3,51, which can be attributed to the group expanding its US dollar-based product portfolio to stay relevant in the ever-changing macro-economic environment.
“With the economy dollarising, the group expanded its USD-based product portfolio in sympathy with the macro-economic environment to remain relevant. On the investment side, the group maintained its policy of investing in real assets centred on minimising the downside impact of local currency high inflation,” said Mr Manzai.
“An increase in USD revenue has been translated into an increase in USD-denominated investments.”
USD
Mr Manzai, reported a substantial increase in overall net investment returns. In hyperinflation-adjusted terms, the increase is 146 percent, while in historical terms, it’s a remarkable 1 860 percent above the previous year.
He attributed these positive results primarily to fair value gains on the Zimbabwe Stock Exchange. First Mutual plans to leverage group synergies to respond effectively to the macroeconomic environment and secure profitable returns for stakeholders.
Despite the negative impact of El Niño-induced droughts, the company remains optimistic about growth in various sectors, including mining, tourism, retail, financial services and construction.
Although economic shocks may arise from liquidity injections, First Mutual is confident that the Government will be able to manage the situation when it arises.
As a result of the successful year, First Mutual Holdings declared a final dividend of US$1 million payable in US dollars from the profits of the company for the year ended December 31, 2023, which represents US$0,136 per share.
This dividend, when combined with the interim dividend of US$500 000 results in total dividends for the year of US$1,5 million. The dividend will be payable from the company’s operating cash flows on or about June 26 to all shareholders of the company registered at the close of business on June 21 this year. — -chroncile
