Old Mutual clocks $1,4bn revenue
DIVERSIFIED financial services group, Old Mutual Zimbabwe’s revenue topped $1,4 billion for the year ended December 31, 2018, a 41 percent jump from $991 million in the prior year, with a profit of over $300 million from $219 million in the same period.
The group consolidated its strong asset base at $4,4 billion from $3,1 billion in the comparable period, according to the company’s financial statements for the period issued at the weekend.
In a statement accompanying the financial report, chairman, Mr Johannes Gawaxab, said the year 2018 opened on a good note, which saw the group achieve a 36 percent increase in profit after tax from $242, 9 million in 2017 to $329, 8 million in 2018, driven by growth in total revenue.
“Profit before tax increased by 36 percent from $242, 9 million in 2017 to $329, 8 million in 2018 and this was mainly driven by growth in total revenue. Total revenue rose by 41 percent from $991 million to $1,4 billion on the back of growth in all main revenue lines, particularly investment gains and banking interest income,” he said.
“Operating profit increased by 23 percent from $64,5 million to $79,2 million, driven by profit growth in the life, banking and asset management businesses. The strong growth in operating profit highlights the performance resilience of the core business operations.”
Mr Gawaxab said gross written premiums (GWP) grew by 10 percent from $194, 8 million in 2017 to $214, 1 million in total for the life and short term insurance businesses. He attributed the trend to a combination of improved client retention and new business. Operating profit for the life business was 31 percent higher than the prior period due to growth in the retail segment and in asset based fees, said the chairman.
However, he said short term insurance business insurance recorded an underwriting loss of $0,3 million attributed to a 47 percent growth in claims from prior year. Mr Gawaxab said the growth in claims was driven by significant private motor claims as repair costs increased on the back of foreign currency shortages, which resulted in an increase in the costs of imported components used for repairs.
The banking business on one hand recorded a profit growth of 17 percent to $49,2 million up from $42,1 million in 2017. The Old Mutual chairman said this was mainly due to growth in net interest income by 19 percent from a combination of growth in loans and advances and an improvement in net interest margin.
In 2018 the group completed the development of a total of 1 082 housing stands in Pumula South and Nkulumane suburbs. Mr Gawaxab said paid up beneficiaries of the project had already started occupying their stands and expected the investment to help clear the housing backlog in Bulawayo.
On the outlook, the chairman said: “Going forward the overall pace of the magnitude of the macro-economic revival is likely to depend significantly on the Government’s ability to sustainably rebuild public and investor confidence, bring spending under control, as well as to re-engage successfully the international community”.
He said Old Mutual group has always had confidence in Zimbabwe’s economic potential and supported the development of economic policies that allow this potential to be realised. — @ queentauruszw.