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HomeCompanies and MarketsMigration to USD spurs rental growth for FML

Migration to USD spurs rental growth for FML

First Mutual Life

Migration to USD spurs rental growth for FML

By Allan Mbotshwa

Insurance giant, First Mutual Holdings Limited’s rental income grew by 199% to ZWL39.1 billion for the year ended 31 December 2023, compared to the prior year figure of ZWL13.1 billion in inflation adjusted terms.

In historical cost terms, a rise of 1,029% to ZWL23.7 billion compared to the prior year was recorded.

The growth arose from a migration to United States Dollars (USD) denominated leases as well as inflation driven adjustments on ZWL rentals.

The occupancy levels stood at 76.7% compared to prior year of 85.52% and the average rental per square metre was US$5.29 compared to prior year of US$3.51.

The overall Group net investment returns amounted to ZWL41.8 million in inflation adjusted terms and ZWL184.3 million in historical cost terms, representing an increase of 146% in hyperinflation adjusted terms and 1,860% above the prior year in historical terms.

The positive investment out-turn was mainly due to fair value gains on the ZSE.

The insurance service result grew by 89% to ZWL141.3 billion compared to the prior year in inflation adjusted terms.

In historical cost terms there was an increase of 724% compared to the prior year figure of ZWL6.7 billion.

The growth was primarily due to the increase in insurance contract revenue.

The Insurance Contract Revenue (ICR) grew by 172%, in inflation adjusted terms, to ZWL1.1 trillion for the year ended 31 December 2023 compared to prior year. In historical cost terms, an ICR growth to ZWL503.3 billion was recorded, up 966% on prior year.

The notable growth in comparison to the previous year was largely driven by the migration from ZWL policies to USD policies as well as continued revaluation of ZWL insurance policy values to ensure adequate cover.

The actual USD business that was written by the Group for the twelve-month period constituted 74% of the total ICR, at US$98.4 million, a growth of 53%, compared to a prior year figure of US$62.7 million.

“Notice is hereby given that the Board has declared a final dividend of US$1,000,000 payable in United States Dollars from the profits of the Company for the year ended 31 December 2023 which represents zero point one three six (0.136) United States cents per share,” said the Group Chairman, Mr Amos Manzai. 

This dividend, when combined with the interim dividend of US$500,000 results in total dividends for the year of US$1,500,000.

“The dividend will be payable from the Company’s operating cash flows of the company for the year ended 31 December 2023 on or about 26 June 2024 to all shareholders of the Company registered at close of business on 21 June 2024,” he added.

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