Regional diversification pays off for Zimre Holdings Business Reporter
INVESTMENT holding company, Zimre Holdings (ZHL) says regional diversification has helped to offset the impact of Covid-19, after the regional countries implemented various interventions to mitigate effects of the pandemic.
ZHL has operations that span across insurance and the property sector and has presence in regional countries that include Botswana, Mozambique, Malawi and Zambia.
Mr Benedict Kumalo, the group’s chairman, said despite the onset of the Covid-19 pandemic which brought about severe interruptions to economic activity, the group achieved modest growth and profitability in 2020, underpinned by strong performance in the Botswana and Mozambique operations.
“The regional diversification strategy became handy as the impact of the outbreak of the Covid-19 pandemic on group performance was less severe as different fiscal and monetary interventions in each country where the Group operates were implemented to mitigate the effects of the pandemic,” he said in the company’s annual report for the year 2020.
He said the impact of Covid-19 and strict lockdown measures introduced towards the end of March 2020, and were gradually relaxed in the course of the year, interrupted business activities.
“The group remained resilient and implemented business continuity plans which enabled it to maintain its operations, deliver services and products to customers whilst safeguarding the safety and health of both employees and other stakeholders.
“In most jurisdictions where the Group operates, the Insurance Sector was designated as an essential service and exempted from some of the lockdown measures and hence operations continued amidst strict adherence to health and safety protocols,” Mr Kumalo said.
He noted that as a result of the pandemic outbreak, the Group accelerated the digitalisation and automation strategy requiring ongoing retraining, reskilling, reallocations, working from home and employee rationalisations.
The group’s total income for the year increased by 584 from $0,6 billion in 2019 to $4,4 billion in 2020, mainly driven by the strong top line growth in premium income in Botswana and Mozambique.
“This was after the units consolidated their respective market positions, the growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency,” he said.
During the year, the regional operations contributed 57 percent in gross written premium (GPW) compared to 64 percent in 2019.
“The contribution mix is underpinned by the clawback in the Zimbabwean operations and the continued beneficial hedging effects of the regional operations.”
ZHL in the period 2016 to 2020 moved to recalibrate and reconstruct its organizational structure, seeking to regain and or pursue lost control or influence in select SBUs, disposing of non — core and non— strategic investments.
Mr Stanley Kudenga, the group’s chief executive, said the group was now moving to realign and reallocate group financial resources to efficient utilisation.
“ZPI was acquired through a successful offer to minorities, and acquisition of FLA from NSSA and Imara. “We are also crystallising control over wallet power through the ZPI Delink and optimising Group Treasury across the enlarged Group.
“The memories of a rich history and contribution to the Zimbabwean economy through different sectors of (Insurance, Property, and Agro – processing) + renewed strategic thinking have delivered a new dawn to firm value for all stakeholders,” he said.
He noted that the group now has complete control and influence of the pillars of value extraction across the Group creating capacity to; offer complimentary products and serve customer needs, control wallet power and deployment of resources and destiny and return earned on all investments.
Mr Kudenga said the group company is in the process of capitalising its regional operations in an effort to widen market reach.-herald.cl.zw
