Fidelity Life in major revenue boost
ZIMBABWE Stock Exchange-listed insurance concern Fidelity Life Zimbabwe posted a 143 percent jump in revenue to $62,5 million for the half year to June 30, 2019, compared to $25,8 million achieved over the same period in 2018.
Revenue boost was hugely necessitated by improvements in fair-value gains on both property and equity portfolios.
The property portfolio’s gains rose to $29,9 million while the equity portfolio had recovered to $4,1 million from a loss of $1,2 million in 2018 comparative.
The group’s disposal of construction equipment also contributed immensely to revenue growth as profits realised there effected a 392 percent increase in other income from $0,9 million to $4,7 million in the period under review.
With contributions from the Malawi business, premium income went up 84 percent to $16,6 million from $9,1 million recorded in the prior year comparative.
Interest income from the micro-finance business went up 136 percent to $3,6 million from $1,5 million recorded in 2018 comparative.
Revenue contributions from the sale of stands, however, dwindled to $0,56 million from $12 million in 2018 comparable period.
This had resulted from expenses on the Southview development project that had reached its tail-end.
As reported in the financials, total expenses rose 162 percent “largely due to inflationary pressures and the exchange rate impact on the operating results of the Malawi business.”
Profit before tax at $4,6 million was 24 percent up from the prior $3,7 million. This necessitated a jump in profit for the year to $3,2 million from $2,3 million recorded in 2018 comparative.
The group made headways during the trading period as it managed to launch in May “a first in Zimbabwe Funeral Cash Back Product that offers customers cash back after five claim free years.”
The product, a first of its kind in Zimbabwe, was a response to customers’ call for benefits from their policy before death.
Meanwhile, the group remain optimistic about its envisioned future of becoming a “holistic financial services provider” while value-preservation remain a priority for the insurance sector at a time volatility characterizes the trading space;
“In the short to medium term, the local currency is expected to remain under pressure and lose further ground against the United States dollar due to depressed mining and manufacturing output, limited access to external financing and the low level of international reserves.
“With the economy indexing pricing to the USD, high inflation is forecast to persist in the short term. Traditional investment markets are expected to continue yielding negative returns making value preservation a top priority for the insurance industry,” said group chairman Fungai Ruwende in a statement accompanying the half-year financials.