Lower Insurance Claims Boost First Mutual Results
First Mutual Holdings Limited end of year results for year ending 31 December 2016 which reflected a profit of US$9,3 million compared to US$0.1 million in 2015 has been attributed to lower insurance claims, reduction in impairment allowances and acquisition expenses.
By Jeoffrey Ncube
Addressing shareholders at the company’s Annual General Meeting in Harare on Wednesday, FML Chairperson, Oliver Mtasa said the group had made profit due to the increase in fair value gains.
“The group had an investment profit of US$8.8 million in 2016 compared to investment losses of US$4.7 million in 2015 mainly due to the increase in fair value gains on quoted equities following the recovery of the stock market in the fourth quarter of 2016, a lower negative fair value adjustment on investment property and increased interest income arising higher money market investment,’’ said Mtasa.
He added that group’s total assets increased by 10 percent on the back of increases in cash and balances with banks, equity investments and dept securities.
“The Group’s total assets increased from US $209 million at 31 December 2015 to US $229.7 million at 31 December 2016.
“The growth was mainly a result of increases in cash and balances with banks (US$9.5 million) equity investments (US$8.4 million) and dept securities (US$ 5.6 million0 driven by the significant improved cash generated from operators,” said Mtasa.
He added that the group will maintain a cautious approach in the management of its investment portfolio with core focus on value preservation.
“The group will maintain a cautious approach in the management of its investment portfolio with core focus on value preservation.
“Money, market interest rates are expected to decline as banks move to contain costs of funds in the wake of reduced lending and decline in fee and transactional income,” he said.
In view of the focus on current initiatives and the need to consolidate the operations of group companies, directors recommend that no dividend be paid from the profit of the group for the year ended 31 December 2016.