ZHL confident group primed for profitability

ZIMRE Holdings Limited (ZHL) is confident that the measures it has put in place to support operations will guarantee relevance and profitability across its diverse markets.

The group, in a statement of financials for the half-year to June 2024, said its property-based assets would play a crucial role in achieving the company’s objectives amid plans to re-engineer and repurpose several of the properties to extract greater value for shareholders.

This is despite the group’s projections that the Zimbabwean economy is likely to continue to face challenges for the remainder of the year.

The challenges, ZHL said, would likely be characterised by issues such as the exchange rate instability, persistent power and energy shortages, and inflation push.

These may be compounded by spillover effects of geopolitical tensions disrupting the usual efficiencies of supply chain logistics for key commodities from traditional supply markets.

ZHL board chairman, Mr Desmond Matete said the group’s prospects would be driven by digitalisation as the group’s business-to-consumer (B2C) units invested significantly in customer experience accessibility by the clientele.

“ZHL remains positive that the measures the group has put in place, which cut across the different markets within which it operates, will ensure it remains relevant and profitable on a sustained basis. Relevance of the group’s value proposition will be maintained through digitalisation,” said Mr Matete.

Zimre’s value proposition will be preserved through digitalisation among other initiatives.

The group’s business-to-consumer divisions have made substantial investments to ensure that the customer experience is accessible, intuitive, and seamless.

The interventions would, however, seek to maintain the essential human connection and relational aspects that are crucial to their industry.

To increase the company’s prominence and profitability, the group has made significant investments in the insurance value chain, extending its reach beyond Zimbabwe to encompass the entire SADC sub-region.

“Plans are underway to use the regional units to further expand into the northern African market, exploiting the policy frameworks and enabling protocols of the African Continental Free Trade Area (AfCFTA) whilst also taking the opportunity to restructure the balance sheets of the regional operations to augment their underwriting capacity and competitive capital,” stated the chairman.

The chairman also hinted that the group would continue to direct efforts towards sustainability by committing to sustainable practices and incorporating environmental, social governance (ESG) initiatives into its projects through its real estate investment trust.

ZHL noted that profitability will be pursued through the establishment of new markets with the expected listing of the Eagle REIT in the fourth quarter of this year.

This initiative aligns with the group’s mission to make financial security instruments accessible and inclusive for all Zimbabweans.

However, these developments are happening at a time when the group has faced various challenges since the beginning of 2024 and anticipates these difficulties will persist over the remainder 0f the year.

For the half-year period, ZHL reported a profit tax of US$6,8 million, reflecting a 52 percent increase from US$4,5 million in 2023, driven by strong revenue growth and effective cost management.

The group achieved a 16 percent increase in total income, reaching US$15 million, primarily driven by significant growth in insurance contract revenue and considerable fair value gains from investment properties and equities.

Insurance contract revenue experienced a remarkable increase of 63 percent, rising to US$31,6 million in June 2024 from US$19,3 million in June 2023.

The strong growth was driven by significant expansion in regional reinsurance units and the life and pension segment.

Reinsurance operations comprised 75 percent of the total revenue, with Zimbabwe and Mozambique contributing 26 percent and 14 percent, respectively.

The life and pension segment maintained a solid performance, accounting for 22 percent of revenue, while the short-term business unit showed signs of recovery, contributing 3 percent.

The regional expansion strategy is proving effective, with reinsurance operations in the area contributing 49 percent of total revenue.

ZHL’s total assets rose to US$204,1 million, marking a 20 percent increase.

The group maintained a robust cash position, generating US$10,6 million from operations, a 79 percent rise from US$5,9 million in the previous period.

The cash-to-profit ratio concluded the period at 1,55 times, surpassing the benchmark of 1,2 times.

ZHL Group indicated that it is well-positioned to uphold its commitment to security, growth, and profitability.-herald