Nicoz Diamond Insurance Limited posted an operating profit of $1,5 million for the half-year ending 30 June 2017- a 17% drop from the same reporting period in 2016.
According to the group chairman, James Karidza, the reduction was mainly as a result of retrenchment costs incurred in Malawi to align future expenses to income.
“The reduction was mainly as a result of retrenchment costs incurred in Malawi to align future expenses to income.
“There was also an increase in claims costs in Malawi due to the impact of price adjustments on imported motor spare parts,” said Karidza.
Karidza also said the group recorded a 14% decrease of profits from insurance.
“Profits from insurance underwriting, included in operating profit, amounted to $1,160,095, a decrease of 14% to prior year of $1,349,743.
“The Zimbabwean entity’s underwriting profit increased by 46.6% due to the increase in gross premium written and controlled operating costs,” he said.
The group’s income from properties and other investments contributed $1,204,544 to operating profit and this was a 77.7% growth to prior year due to performance of the quoted equities in Zimbabwe.
The cash generation from operating activities improved by 191% compared to prior year despite the premium collection challenges, due to the stringent management of operating expenses and other cash outflows.
Profit before tax for the Group amounted to $2,098,938 after taking into account the share of profits from the Group’s associates amounting to $38,117.
Group profit after tax for the period amounted to $1,204,110, a marginal decline of 0.5% on June 2016.
The Board did not recommend an interim dividend and is deferring any such declaration until full year performance has been ascertained, noted Karidza.