OLD MUTUAL Zimbabwe Limited recorded 139% increase in net income profit after tax after for the year ended 31 December 2017 recording a US$219,3 million compared to US$91.8 million for the year ended 31 December 2017, a milestone the company says was made possible through strong a raft investment measures employed throughout the year.
By Costa Nkomo
Speaking at the Old Mutual Analysts Briefing in the capital today, Group Chief Executive Officer, Jonas Mushosho revealed that non-banking investments increased by 448% from the previous year (2016) US$116.9 million to close at US$640 .9 million for the year 2017.
“The growth in investment returns was mainly due to the Group’s exposure to listed equities as the Zimbabwe Stock Exchange recorded significant gains with the ZSE industrial and mining indices closing 2017 with full year gains of 130.42% and 143.38% respectively.”
“Gross Premiums grew 5% from US$ 185.4 million to US $194.8 million in total for the life and short term insurance businesses due to a combination of improved client retention and new underwritten,” said Mushosho.
He further revealed that the Adjusted Operating Profit comprised of operating profit plus a normalised investment return on shareholder funds staked up by 25% from US$76.1 million in 2016 to US$95. 5 million due to higher life, banking and asset management.
According to Mushosho, this highlights the strong performance of the core business operations despite the challenging environment where the cash shortages remain acute standing as an exceptional cost driver.
Old Mutual’s Funds Under Management (FUM) for the asset management business were up by 50% from US$1.8 billion to US$ 2.7 billion largely due to a combination of growth in net client cash flows generated and gains on ZSE listed equity investments.
“As a result of the growth in FUM, fee income and profit before tax for the asset management business increased by 28% and 64% to US$20.6 million and US$ 10.7 million respectively,” Mushosho.
The increase in net income is also attributed to the group’s sensitivity with operation and administrative costs through the year 2017 as the use of technology increased from the previous year (2016) compared to 2017.
Total assets increased by 45% from US$2.2 billion to US$3.1 billion driven by growth in investments and securities, loans and advances and cash equivalents.
The group expects new heights this year stemming from its non-banking investments planted countrywide.
